A deal has been reached for Ocwen Financial Corp. to acquire the parent of PHH Mortgage Corp. The merger is intended to bring more scale to Ocwen.
A news release late Tuesday from Ocwen indicated that it has reached a definitive agreement to acquire all outstanding shares of PHH Corp.
Both companies have been the target of various regulatory actions and have seen their mortgage servicing portfolios slashed over the past five years.
West Palm Beach, Florida-based Ocwen has reduced its primary servicing portfolio from
nearly $400 billion at the end of 2013 to less than $200 billion. At Mount Laurel, New Jersey-based PHH, the servicing portfolio has been cut to less than $10 billion from more than $130 billion during the same period.
The acquisition will cost Ocwen $360 million in cash.
“On a combined basis, as of Dec. 31, 2017, the company would service 1.9 million loans with an unpaid principal balance of $328 billion and originate over $3 billion of residential mortgage loans, including reverse mortgages, annually,” the news release stated.
Ocwen expects that the
increased size and scale of the combined company should create various strategic and financial benefits.
The transaction, which is subject to various closing conditions, is expected to close in the second half.
