Another upcoming acquisition by Ocwen Financial Corp. will build on the origination platform it is inheriting through other forthcoming acquisitions. However, the latest deal involves the quickly diminishing reverse mortgage business.
The Atlanta-based company last week won its bid to acquire Residential Capital LLC’s mortgage servicing and origination platform assets out of bankruptcy.
That followed an announcement three weeks earlier that it reached an agreement to acquire Homeward Residential Holdings Inc., formerly known as American Home Mortgage Servicing Inc., in a transaction that will give Ocwen a correspondent origination platform.
Now, Ocwen plans to originate reverse mortgages with its agreement to acquire Genworth Financial Home Equity Access Inc. from Genworth Financial Corp.
The $22 million deal (Mortgage Daily originally mistakenly reported “$22 billion deal”) was disclosed in a filing Wednesday with the Securities Exchange Commission.
Ocwen expects to close on the merger in the first-quarter 2013.
Once the transaction is done, Genworth will be renamed Liberty Home Equity Solutions Inc.
The deal will provide Ocwen with retail, wholesale and correspondent origination channels.
Genworth originated 4,407 home-equity conversion mortgages during the 12 months ended Sept. 30, making it the third-largest originator of government-insured reverse mortgages, according to the newsletter Reverse Market Insight.
The Ocwen transaction could be a boost to the ailing reverse mortgage sector, which has seen the departure of its biggest players over the past two years including Bank of America Home Loans, Financial Freedom, MetLife Bank, SunTrust Mortgage Inc. and Wells Fargo Home Mortgage.
As these lenders have abandoned the industry, HECM production has plummeted to 54,842 units in fiscal-year 2012 from 114,691 endorsements reported for fiscal-year 2009.
On top of its planned acquisitions of Genworth, Homeward and ResCap — Ocwen has recently acquired the assets of Saxon Mortgage Services Inc., $15 billion in mortgage servicing rights from JPMorgan Chase & Co. and HomEq Servicing.