With the closing of its latest servicing rights acquisition, Nationstar Mortgage LLC has joined the ranks of the 10-biggest residential servicers in the country. In anticipation of the growth, the company has increased its staff by more than a third from the end of last year.
A disclosure in March from the Lewisville, Texas-based lender indicated that it had struck a deal to acquire around $63 billion in mortgage servicing assets from Aurora Bank FSB for $268 million.
At the time, Nationstar reported that its servicing portfolio stood at 645,000 loans for $107 billion.
Since then, Nationstar announced that it agreed to acquire $10.4 billion in residential mortgage servicing rights from Bank of America, N.A.
On Friday, parent Nationstar Mortgage Holdings Inc. announced that the unit completed the acquisition of the Aurora portfolio from parent Lehman Brothers Holdings Inc.
Around three quarters of the $63.7 billion in Aurora loans are non-conforming loans held in private-label residential mortgage-backed securities, while the rest are held in Fannie Mae and Freddie Mac pools.
Nationstar affiliate Newcastle Investment Corp. said it helped fund the deal by acquiring 65 percent of the cash flows from the servicing rights for $177 million.
The closing of the Aurora acquisition brought Nationstar’s servicing portfolio to approximately 1 million loans for $177 billion, making it the eight-largest residential servicer behind PHHÂ Corp., according to data tracked by Mortgage Daily.
Its standing could substantially improve if it is successful in its bid to acquire $201 billion in mortgages from bankrupt Residential Capital LLC — a move that would land it in the No. 5 spot.
Nationstar has been beefing up its staffing as it prepares to manage the larger portfolio.
Headcount finished 2011 at 2,599 employees, according a Feb. 24 filing with the Securities and Exchange Commission.
In today’s announcement, the growing lender said that its staff size has reached 3,500 employees. Some of the new employees were recruited from Aurora.
“Though not a required part of the transaction, Nationstar has said that many of Aurora’s employees have taken positions with Nationstar, allowing continuity of the excellent service received by borrowers as well as minimizing, as much as possible, the significant personal impact to the employee base from the sale transaction,” Lehman Brothers stated in a separate news release.
Nationstar is moving into a 180,000-square-foot facility previously occupied by MetLife Home Loans in Irving, Texas. As part of an economic development deal reached with the city, 800 people will be employed at the facility for at least seven years. While published reports indicate that Nationstar advised Irving officials that it plans to add 2,000 more jobs in North Texas during the next five years, a spokesman said the company doesn’t comment on hiring plans.
With the sale, the breakup of Aurora is complete. Its commercial servicing assets were sold to Ocwen Financial, and its customer deposits are being transferred to New York Community Bank. Lehman said that after the closing of the insured deposit portfolio, Aurora will continue to exist as a federal saving bank as it maintains compliance with the consent order issued in April 2011 by the Office of Thrift Supervision.
