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Ocwen Looks to Increase Market Share

""Ocwen Financial Corp."":http://www.ocwen.com continues to make moves to expand its portfolio. The Georgia-based special servicer disclosed in a filing with the Securities and Exchange Commission (SEC) that it has entered into a servicing rights purchase agreement with ""JPMorgan Chase"":http://www.jpmorganchase.com.
[IMAGE] The transaction involves mortgage servicing rights (MSRs) for 82,000 non-prime loans with an unpaid principal balance of approximately $15 billion. Ocwen said in ""its regulatory filing"":http://shareholders.ocwen.com/secfiling.cfm?filingID=1019056-11-1058&CIK=873860 that the deal represents less than 2 percent of JPMorgan's mortgage servicing portfolio.

The purchase price, inclusive of servicing advance receivables, is approximately $950 million. Ocwen expects to finance $625 million of the purchase price through an existing servicing advance facility.

The transaction is expected to close on January 1, 2012, but Ocwen notes closing may occur in phases on more than one date.

The JPMorgan deal is the latest in a string of transactions bolstering Ocwen's portfolio.

On September 1st, Ocwen completed its acquisition of Litton Loan Servicing from ""Goldman Sachs"":http://www.goldmansachs.com. As a result of


the Litton purchase, the unpaid principal balance of Ocwen's servicing portfolio grew by $38.6 billion. New loans boarded included approximately 245,000 non-prime residential mortgages.

Ocwen also acquired Litton's servicing platform, based in Houston, Texas and McDonough, Georgia.

In October, Ocwen entered into an agreement to purchase ""Morgan Stanley's"":http://www.morganstanley.com Saxon Mortgage Services and its servicing portfolio of approximately $26.8 billion in unpaid principal balance. The Saxon transaction is expected to close in the first quarter of 2012.

Excluding the MSR purchase from JPMorgan and the acquisition of Saxon, Ocwen services $106.1 billion in residential mortgages, making it the 12th largest mortgage loan servicer in the United States.

""We expect that other non-prime servicing platforms are likely to come to market in the next several months, and to the extent that we find these opportunities to be attractive, we believe that Ocwen can compete effectively for these opportunities,"" the company said in its filing with the SEC.

Ocwen also referenced a new venture with Altisource and its Lenders One business called Correspondent One, which the company says will allow it ""to compete for servicing rights for newly originated Federal Housing Administration loans.""

The company went on to say that if proposed changes in the servicing fee structure for Fannie Mae and Freddie Mac loans are implemented, it may be able to compete for the servicing of an even broader market share of new loans.

Ocwen also plans on developing capabilities to service new loan segments, such as reverse mortgages and home equity lines of credit.