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Agency MSR Deal Worth $45 Billion Finalized Between Chase, Ocwen

HELOCAn Agency mortgage servicing rights deal worth approximately $45 billion between Chase and Ocwen Financial Corp. has been finalized after two and a half months, according to an announcement from Chase on Thursday.

Ocwen first announced on March 2 it had signed a letter of intent to sell the the $45 billion portfolio, which includes about 266,000 high-quality Fannie Mae loans, to an anonymous buyer. Media reports that surfaced later that week indicated that the buyer was Chase, which was confirmed on Thursday by both parties in the transaction.

"Ocwen previously announced that the company signed a letter of intent with a buyer on the sale of mortgage servicing rights on a portfolio of performing Agency loans owned by Fannie Mae with a total unpaid principal balance of approximately $45 billion," an Ocwen spokesman said on Thursday. "The letter of intent was subject to a definitive agreement and Fannie Mae and FHFA approvals."

For Chase, purchasing the high-quality Agency loans is consistent with the New York-based bank's strategy of enhancing the quality of its mortgage business.

"Buying this prime servicing book will improve the quality of our servicing portfolio and will help drive a stronger and less volatile mortgage business," Chase Mortgage Banking CEO Kevin Watters said. "We expect the portfolio, in addition to lower delinquency rates overall, will help improve the value of our business."

Chase announced that it will begin welcoming new customers later this month and that it will begin onboarding the loan portfolio on June 1. Chase said that about half of the new customers already have another product with the bank.

“We are pleased to welcome new customers to Chase Mortgage Banking and look forward to showing them why Chase is the number one large bank in customer satisfaction,” said Mike Weinbach, Chase Mortgage Banking head of servicing. “Delivering a great customer experience will be our top priority as we begin transitioning new customers in June.”

The Chase deal is the latest in a series of multi-billion Agency MSR portfolio sales Ocwen has conducted this year. The Atlanta-based non-bank mortgage servicer has sold two Agency MSR portfolios to Nationstar this year (one in February worth $9.8 billion and one in March worth $25 billion) and one to Green Tree Loan Servicing in March (worth $9.6 billion).

"The agreement is now signed and the necessary approvals have been obtained," Ocwen said on Thursday. "This sale to Chase furthers Ocwen’s corporate strategy of reducing the size of the company’s Agency servicing portfolio."

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.

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