Just a week after disclosing plans to end originations, Aurora Bank FSB has agreed to unload servicing assets. The transaction will create the nation’s ninth-biggest residential mortgage servicer.
A notice to its correspondent clients last week indicated that Aurora decided to close its residential lending unit.
As part of that move, 146 Chesterfield, Mo., employees will be laid off next month.
On Tuesday, Nationstar Mortgage LLC announced that an agreement was reached to acquire around $63 billion in mortgage servicing rights from Aurora. Around three-quarters of the portfolio is held in non-conforming, private-label, residential mortgage-backed securities, while the rest are being serviced for Fannie Mae and Freddie Mac.
Based on data maintained by Mortgage Daily, the acquisition will make Nationstar the ninth-biggest servicer of residential loans in the country.
Nationstar said it will pay around $268 million for the servicing rights. Roughly $170 million will come from a co-investment from affiliate Newcastle Investment Corp.
“Nationstar will sell to Newcastle the right to receive approximately 65 percent of the excess mortgage servicing rights after receipt of a fixed basic servicing fee per loan,” the announcement stated. “Nationstar will retain approximately 35 percent of the excess mortgage servicing rights and all ancillary income associated with servicing the loans.”
The deal also includes certain other assets.
Another $210 million will be paid for servicing advance receivables. Nationstar expects to fund the balance of the related servicing advance receivables with around $1.45 billion in advance financing facilities.
The transaction is expected to close by June 30.
Aurora, which Nationstar said is the nation’s 19th-biggest servicer, is a subsidiary of Lehman Brothers Bancorp Inc.
Nationstar, which is based in the Dallas suburb of Lewisville, is preparing for an initial public offering. Its own residential servicing portfolio stands at 645,000 loans for nearly $107 billion. Headcount at the company stands at 2,600.
