According to a pair of filings with the Securities and Exchange Commission, Altisource Residential Corporation (RESI) agreed to separate servicing contracts with two vendors, Fay Servicing and Servis One, which does business as BSI Financial Services.
Under the terms of the servicing agreements, both vendors will “service and provide certain administration, management, modification and disposition services for residential mortgage loans and REO properties acquired by the company and its subsidiaries from time to time.”
According to the terms of the agreements, the servicing agreements will continue until both parties decide to cancel the deal. But Altisource can cancel either deal “upon certain events of default.”
Additionally, Altisource can terminate the deal with BSI Financial without cause with 60 days prior written notice. BSI Financial can cancel the deal without cause with 90 days prior written notice.
On the other hand, Fay Servicing’s agreement can be terminated only by mutual agreement or by Altisource “upon certain events of default,” or by Altisource, which has the authority to cancel the deal without cause with only 30 days notice.
Fay Servicing appears to have no power to cancel the deal independently of Altisource.
Altisource Residential, which bases its business on acquiring single-family rental homes through the purchase of sub-performing and non-performing mortgages as well as single-family homes at or following the foreclosure sale, recently lost its chairman of the board, William Erbey.
Erbey was forced to resign from his position with Altisource and its four related companies, Ocwen Financial (OCN), Altisource Portfolio Solutions S.A. (ASPS), Altisource Asset Management Corporation (AAMC), and Home Loan Servicing Solutions, Ltd. (HLSS) as part of a $150 million settlement with the New York Department of Financial Services over allegations into Ocwen’s servicing practices and its relationships with its affiliated companies.
Altisource Residential’s stock closed Wednesday at $17.79, down 1.71% for the day. In the last 12 months, Altisource Residential’s stock has fallen 38.44%.
But that’s nothing compared to Altisource Asset Management Corporation, which, according to the company's website, exists solely to provide “portfolio management and corporate governance services” to Altisource Residential.
Altisource Asset Management’s stock closed Wednesday up slightly, to $170.40 per share. In the last 12 months, Altisource Asset Management’s stock has fallen 81.84%.