Home / Daily Dose / Ocwen Agrees to Sell Agency MSR Portfolio Worth $45 Billion
Print This Post Print This Post

Ocwen Agrees to Sell Agency MSR Portfolio Worth $45 Billion

Ocwen Mortgage Servicing RightsOcwen Financial has signed a letter of intent to sell the mortgage servicing rights for $45 billion worth of Agency performing loans, according to an announcement on Ocwen's web site late Monday night.

The portfolio consists of about 277,000 performing loans owned by Fannie Mae. The approximate unpaid balance of the loans is approximately $45 billion. According to the announcement, Ocwen expects the deal to close by the middle of the year. The transaction is subject to approval from Fannie Mae as well as the Enterprise's conservator, the Federal Housing Finance Agency, and other customary conditions. Ocwen expects the loan servicing to transfer over the second half of 2015.

Monday's announcement came less than a week after Ocwen announced it was selling an MSR portfolio worth $9.8 billion in performing Agency loans to Dallas-based Nationstar. That portfolio contained approximately 81,000 performing residential mortgage loans owned by Freddie Mac.

These two transactions together represent approximately $55 billion in unpaid principal balance for which Ocwen has agreed in the last week to sell the mortgage servicing rights. Both of the transactions are expected to be completed in the next six months. According to Ocwen's announcement, the Atlanta-based servicer expects the two transactions will generate approximately $550 million in proceeds and "accelerate Ocwen's strategy to reduce the size of its Agency servicing portfolio."

Ocwen did not name the buyer in the $45 billion transaction announced Monday, though Ocwen President and CEO Ron Faris did say last week that his company was looking forward to "exploring additional MSR transactions with Nationstar."

Also announced on Monday, Ocwen entered into an amendment to its $1.3 billion Senior Secured Term Loan to remove certain restrictions on asset sales and permanently increase a financial covenant. To repay cash received from asset sales, Ocwen has agreed to an accelerated repayment schedule.

"We are pleased with the actions of our term loan investors. They have been supportive of Ocwen and recognize the importance and benefit of executing on our strategy," Faris said. "Additionally, their willingness to enter into an amendment with Ocwen is an affirmation that the Company is, and always has been, in compliance with all of its SSTL covenants."

Ocwen's regulatory troubles over the last year have been well-documented. The Atlanta-based non-bank mortgage servicer agreed to a $150 settlement with the New York Department of Financial Services in December 2014. That settlement included the departure of chairman Bill Erbey, who founded the company more than 30 years ago.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
x

Check Also

Federal Reserve Holds Rates Steady Moving Into the New Year

The Federal Reserve’s Federal Open Market Committee again chose that no action is better than changing rates as the economy begins to stabilize.