Nationstar Mortgage files for IPO
Nationstar Mortgage Holdings hopes to raise as much as $400 million in an initial public offering, according to a regulatory filing.
Nationstar, based in the Dallas suburb of Lewisville, is one of the five largest nonbank mortgage servicers in the U.S., according to its regulatory filing. It serviced more than 389,000 loans with an aggregate unpaid principal balance of $64.2 billion as of Dec. 31.
The mortgage servicing company also originates primarily conventional agency and Federal Housing Administration and Department of Veterans Affairs residential mortgage loans. In 2010, it originated $2.8 billion, consisting primarily of conventional residential mortgage loans. Its strategy is to sell its loans to the secondary market on a servicing retained basis or through servicing released whole loans sales to major conduit investors.
Its ancillary businesses include REO management as well as recovery of charged-off mortgage deficiencies. It also owns a noncontrolling interest in National Real Estate Information Services, which provides settlement and valuation services.
The company said it plans to be listed on the New York Stock Exchange, but did not give a ticker or expected public offering price.
The company narrowed its 2010 net loss to $9.9 million, down from a net loss of $80.9 million in 2009, according to its regulatory filing. Its servicing business has grown by a compounded annual rate of 72% since 2007 when its servicing portfolio stood at $12.7 billion, it said.
"We believe the current dynamics of the residential mortgage market represent an exceptional opportunity for leading, nonbank servicers to grow their servicing portfolios by acquiring mortgage servicing rights, entering into subservicing contracts and by assuming responsibility for mortgage operations from regulated entities," its filing said.
"We believe we are attractively positioned to capitalize on the current and future state of the residential servicing sector due to our proficiency in servicing both higher-risk accounts and newly originated loans with attractive financial returns."
Nationstar was originally known as Nova Credit Corp. when it was founded in Denver in 1994. It later moved to the Dallas area and became Centex Credit Corp. and was later merged into another Centex entity. In 2006, private-equity controlled FIF HE Holdings acquired the company.
In terms of risk factors, Nationstar pointed out the ongoing attorneys general investigation as well as state and federal investigations into mortgage servicers and their practices. Regulatory changes on the way via the Dodd-Frank Act could also resulted in elevated costs for regulatory compliance, it said.
Write to Kerry Curry.
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