June 13 Ocwen Financial Corp said it
would buy mortgage servicing rights and related advances from
OneWest Bank for $2.53 billion, the latest in a string of
acquisitions that have fueled the company's explosive growth and
nearly tripled its shares over the past year.
Under the deal, Ocwen will purchase about $78 billion in
unpaid principal balances of mortgage servicing rights (MSRs)
through a combination of cash and available credit.
The total purchase price includes $446 million in respect of
the MSRs and about $2.1 billion for the servicing advances,
Ocwen said in a regulatory filing. ()
Atlanta-based Ocwen has been picking up companies that
collect payments on subprime mortgages - known as servicers - or
the underlying service rights, as banks and private equity firms
look to shed them because of new regulations and capital
It bought mortgage lender Homeward Residential Holdings from
Wilbur Ross' private equity firm for $750 million last October.
Ocwen also bought the majority of Ally Bank's MSR portfolio for
$585 million earlier this year.
The fast growth of mortgage servicers, including Ocwen and
peers such as Nationstar Mortgage Holdings Inc and
Walter Investment Management Corp, have drawn scrutiny
from regulators, who have been more watchful of the home
mortgage business after the housing bust in 2007-2009.
Ocwen's portfolio more than doubled from the fourth quarter
to the first quarter, and the company is now servicing more
mortgages, as measured in dollars, than banks such as Citigroup
Inc and U.S. Bancorp.
The OneWest deal is expected to close in stages during the
second half of the year, Ocwen said.
Pasadena, California-based OneWest is a federal savings bank
with 75 retail branches and over $25 billion in assets.
Both companies have agreed to set a termination fee of $50
million in case the deal does not go through.
Ocwen shares closed up 4 percent at $45.74 on the New York
Stock Exchange on Thursday. They were up about 3 percent in