With its winning bid to acquire the mortgage servicing portfolio of Residential Capital LLC, Ocwen Loan Servicing LLC is on its way to becoming the fifth-biggest residential mortgage servicer in the nation.
Ocwen reported a $127.9 billion mortgage servicing portfolio as of June 30. The portfolio recently expanded with the April acquisition of Saxon Mortgage Services Inc.’s $22.2 billion in mortgage servicing.
A deal announced earlier this month to acquire Homeward Residential Holdings Inc. will add another $74.1 billion to the Atlanta-based company’s servicing portfolio.
Now, Ocwen has won a bid to acquire ResCap’s mortgage servicing and origination platform assets, according to a ResCap announcement Wednesday.
Joining Ocwen in the $3 billion deal is Walter Investment Management Corp.
ResCap filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code at a federal bankruptcy court in Manhattan on May 14.
The transaction is subject to definitive documentation and bankruptcy court approval, among other things. A sale approval court hearing is scheduled for Nov. 19.
“ResCap will continue to work with all parties involved to ensure the best possible outcome for its creditors and other stakeholders in its Chapter 11 cases,” the statement said.
Ocwen beat out Nationstar Mortgage Holdings Inc., which said in May it signed a definitive agreement to acquire mortgage servicing and other assets from ResCap and its affiliates as a “stalking horse” bidder.
As of March 31, former ResCap parent Ally Financial Inc. reported that the company’s total mortgage servicing portfolio stood at $338 billion. After the ResCap bankruptcy, Ally’s portfolio fell to $137.1 billion as of June 30 — putting the remaining ResCap servicing portfolio in the neighborhood of $200 billion.
Depending on servicing rights being picked up by Walter Investment, Ocwen’s mortgage servicing portfolio has the potential to reach $400 billion — leaving it as the fifth-biggest servicer in the country behind Wells Fargo & Co., which serviced $1.879.0 trillion as of Sept. 30; Bank of America Corp., where the servicing portfolio was reported at $1.475.7 trillion; JPMorgan Chase & Co., which had $996.3 billion in servicing; and Citigroup Inc., with a $471.9 billion portfolio.
Ocwen potentially knocks U.S. Bancorp from its perch as the fifth-biggest servicer with a portfolio of $270.3 billion.