A deal hammered out last month for bankrupt Residential Capital LLC to unload production and servicing assets has been approved by the bankruptcy court.
Last month, Ocwen Loan Servicing LLC and Walter Investment Management Corp. jointly won a bid to acquire ResCap’s mortgage servicing and origination platform assets for $3 billion. At the time, Mortgage Daily estimated that ResCap serviced around $200 billion in mortgages.
Walter Investment subsequently disclosed that it was footing $540 million of the purchase price and receiving servicing rights on 400,000 Fannie Mae loans for $50.4 billion, $183 million in servicing advances and ResCap’s originations and capital markets platforms.
ResCap and 27 other Ally entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in May.
A news release Tuesday indicated that the U.S. Bankruptcy Court for the Southern District of New York approved the joint bid from Ocwen and Walter.
Approval of the bid was reportedly recommended to the court by ResCap’s board and management and supported by the unsecured creditors’ committee.
“The approval of the bankruptcy court is an important next step towards completing our acquisition of ResCap’s private label and Freddie Mac servicing assets which we believe will significantly advance Ocwen’s strategic goals to expand our servicing platform and portfolio,” Ocwen Chief Executive Officer Ron Faris said in the announcement.
The acquisition is subject to customary closing conditions for a transaction of this nature including approval by Fannie, Freddie and various government agencies.
Ocwen said the transaction is expected to be completed by the first quarter of next year, and the final purchase price could change based on the unpaid principal balances of the related assets and other customary adjustments.
“Neither Ocwen nor Walter anticipates the need to raise any additional equity capital to close the transaction,” the statement said.