The acquisition of residential servicing rights by a mortgage servicer based in Texas will result in a 42 percent increase in its total servicing portfolio and create economies of scale.
Two agreements have been struck for the sale of mortgage servicing rights on a combined $2.7 billion in loans based on the unpaid principal balance, according to an announcement released Tuesday.
One of the deals already closed on Nov. 16, while the second transaction is slated for a Dec. 1 consummation.
The buyer of both portfolios is Vericrest Financial Inc. No sellers were identified.
David Schneider, chief executive officer of the Irving, Texas-based firm, said in the news release that the acquisitions will enhance Vericrest’s position as a national mortgage servicer.
“Combined with our innovative service offerings and state-of-the-art platforms, the increased scale we will achieve through these transactions will support our growth strategy and allow us to deliver best-in-class solutions to a broader client base,” Schneider stated.
The residential servicer operates three centers in California, Oklahoma and Texas.
Vericrest, which previously did business as a subsidiary of CITÂ Group Inc., was acquired in 2009 by Lone Star Fund VI.
Fitch Ratings previously reported that Vericrest serviced 45,676 loans for $6.5 billion as of March 31, 2012.
Included in its servicing portfolio were 39,049 subprime loans for $6.2 billion, 5,395 subprime closed-end second liens for $193.9 million and around 1,200 other loans for $111.7 million.
Fitch rates Vericrest’s primary servicer rating for subprime product at RPS2- and its special servicer rating at RSS2-.
