Nationstar Plans Comeback

Written off by most after watching its subprime operations implode late last year, Nationstar Mortgage is planning to reinvent itself as a prime retail lender operating nearly nationwide, HousingWire has learned. The company plans to expand a small retail lending platform later this month, various sources have informed HW; representatives at the Dallas-based lender did not immediately return phone calls seeking comment by the time this story was published.

Nationstar is a unit of Fortress Investment Group LLC (FIG: 4.50 0.00%), a $43 billion hedge fund and private equity group; Fortress purchased the subprime mortgage banking operations of homebuilder Centex in March 2006 in a deal worth approximately $575 million, which it then renamed Nationstar Mortgage. Fortress also operates under the Champion Mortgage brand, having acquired the former KeyCorp (KEY: 5.32 0.00%) retail origination platform in March 2007.

The once-huge subprime lender and REIT made a very public exit from subprime wholesale lending in September of last year, as the market for private-party subprime and home equity loans disappeared. Nationstar was once among the ten largest subprime lenders in the country, originating $4.4 billion in the first quarter of 2007 before the market evaporated.

The lending exit and subsequent financial difficulties faced by the firm led more than a few market participants to assume that the company had all but folded; but the company never filed for bankruptcy after exiting lending operations, and maintained a small retail origination presence.

Sources near the company told HW Tuesday afternoon that the company quietly and successfully shifted whatever origination volume was still incoming to a conforming mix, and began “slugging away” on a strategy to re-enter the national market as a conforming lender.

Signaling that Nationstar’s reinvention plans are nearing completion, the company recently selected the Mozart point-of-sale and automated underwriting platform offered by Overture Technologies to manage part of its retail platform strategy, according to a press statement put out by the technology vendor on Tuesday. Overture said that Nationstar is planning to originate conforming and FHA loans in 47 states; it will go live on the Mozart platform this August, the tech provider said.

In addition to its retail mortgage aspirations, Nationstar services over 90,000 loans totaling more than $12 billion.

For more information, visit http://www.nationstarmtg.com and http://www.overturetechnologies.com.