Ocwen Financial Corp. is negotiating a deal that would eliminate its interest in mortgage servicing rights on more than $100 billion in loans.
MSRs on approximately $117 billion in residential loans are at the heart of the potential transaction, which was announced on Monday.
The buyer in the deal is
New Residential Corp., which will convert its existing rights on the MSRs to fully owned MSRs, according to the statement.
“As MSRs transfer to New Residential, the MSRs will move to a new sub-servicing agreement that would have a five-year term,” West Palm Beach, Florida-based Ocwen stated. “In effect, the new arrangement would convert the existing arrangement into a more traditional subservicing arrangement and involve upfront payments to Ocwen of $425 million as MSRs transfer.”
Ocwen previously reported a total mortgage servicing portfolio $209 billion as of year-end 2016.
In addition to the MSR transfers,
New Residential will make an equity investment in Ocwen and become a 4.9 percent owner.
The transaction is expected to be completed as soon as possible following the signing of a definitive agreement.