Mr. Cooper Group Inc. [1] has entered into a definitive agreement for the sale of its reverse servicing portfolio, operating under the Champion Mortgage [2] brand, to Mortgage Assets Management LLC (MAM) [3] and its affiliates. Upon the close of the transaction, which is subject to regulatory approvals and other closing conditions, MAM and its affiliates will assume Champion’s reverse portfolio and related operations.
The sale will reduce Mr. Cooper’s servicing portfolio by approximately $16 billion in unpaid principal balance and decrease its balance sheet by approximately $5 billion in HECM and other assets. Pending the close of the transaction, the company will carry the reverse business in discontinued operations.
“We are incredibly thankful to the Champion Mortgage team for their steadfast commitment to our business, and we will work to make the transition for them and our customers as smooth as possible,” said Jay Bray [4], Chairman and CEO of Mr. Cooper Group. “From a strategic standpoint, this is a major transaction—we can now completely focus on our core origination and servicing segments. It also improves profitability, strengthens our capital ratios, and positions us to accelerate growth.”
Chris Marshall [4], Vice Chairman, President and CFO of Mr. Cooper, added, “Measured from inception, Champion Mortgage has been a profitable operation for Mr. Cooper, but it is not a material driver of our business. This transaction strengthens our business model, simplifies our financial statements, and allows us to reallocate liquidity into our core operations. These benefits will contribute to even stronger momentum for Mr. Cooper.”
Mr. Cooper Group also announced the sale of Title365 to Blend Labs Inc. [5] for $500 million, consisting of $450 million in cash, and a retained interest of 9.9%. Consistent with previously disclosed expectations, Mr. Cooper received cash proceeds of approximately $450 million, and recorded an after-tax gain of approximately $350 million.
“This sale and our ability to swiftly and smoothly close this transaction reinforces our commitment to growth and profitability, and is another step we are taking to transform Mr. Cooper into the leading non-bank mortgage company,” said Bray. “Additionally, this transaction adds meaningfully to our tangible book value and liquidity, which puts us in an excellent position to accelerate both growth in our businesses and drive significant incremental shareholder value.”