Monday Morning Cup of Coffee: Goldman's $1B FHFA settlement?

Monday Morning Cup of Coffee: Goldman's $1B FHFA settlement?

America’s lost decade; FHA fees drag; Mortgage lending, RMBS slow to a crawl

Here’s why the FHFA is not a fan of principal reduction

Who's going to pay for that?

Before you judge Dodd-Frank...

Urban Institute: "Can we really calculate the cost?"

Ocwen buys Homeward Residential from WL Ross

Ocwen Financial Corporation (OCN) will buy Homeward Residential Holdings from private equity firm WL Ross & Co. for around $750 million total.

Homeward Residential Holdings is a mortgage servicing and origination business. The deal is equal to approximately $588 million in cash and $162 million in Ocwen convertible preferred stock.

Homeward services about 422,000 mortgage loans with an aggregate unpaid principal balance of over $77 billion. The mortgages are often securitized by Fannie Mae and Freddie Mac.

"Homeward has been profitable in each year of its existence and has also been a wonderful cash flow producer, distributing to us approximately $900 million of cash since the initial investment," Wilbur Ross, CEO of WL Ross & Co. said in a statment. "Mortgage banking is a business of scope and scale, and we believe that the combined company will fill the void created by the ongoing departures of many banks from the overall industry."

Ocwen is hungry and continues to acquire mortgage servicing in the second quarter from big banks looking to shrink their portfolios and adjust to new rules.

"The acquisition of Homeward significantly advances Ocwen's twin strategic growth initiatives to add high return servicing assets to its portfolio and expand origination capacity to provide for a sustainable source of future growth," said Ocwen's Executive Chairman William Erbey. "Homeward brings with it a global servicing platform as well as a growing origination business that is already operating at a $10 billion annual run-rate after launching in late 2011."

Ocwen said it will not need to raise any additional equity capital to close the transaction.

Recent Articles by Jacob Gaffney

Comments powered by Disqus