The next wave of servicing regulation is coming – Are you ready?

Join this webinar to learn what servicers need to know about recent and upcoming servicing compliance regulations and strategies experts are implementing to prepare for servicing regulatory audits.

Inside Look: RealTrends 2021 Brokerage Compensation Study

Steve Murray, senior advisor to RealTrends, gives an exclusive first look at the 2021 RealTrends Brokerage Compensation Report.

Logan Mohtashami on trends in forbearance exits

In this episode of HousingWire Daily, Logan Mohtashami discusses several hot topics in the housing market, including recent trends in forbearance exits and future homebuyer demand in the midst of inventory shortages.

How lenders can prepare for increasing regulatory pressures

As compliance becomes an increased focal point for mortgage lenders and investors, staying ahead of state and federal regulations can be the difference between a flourishing business and one mired in fines.


PHH selling off entire mortgage servicing rights portfolio

New Residential buying up all PHH's MSRs, PHH will subservice for 3 years

Nearly two months after announcing that it planned to sell off its Ginnie Mae mortgage servicing rights portfolio, PHH said Wednesday that it plans to sell its entire remaining mortgage servicing rights portfolio in a massive deal with New Residential Investment.

According to PHH, it plans to sell its entire portfolio of mortgage servicing rights and related servicing advances to New Residential, excluding the Ginnie Mae portfolio it plans to sell to Lakeview Loan Servicing.

Per details provided by PHH, the underlying pool contains 480,000 mortgages with a total unpaid principal balance of $72 billion.

Based on the “MSR portfolio composition” and market conditions, PHH said that it expects the proceeds of the deal to be approximately $912 million.

Of that $912 million, approximately $612 million is from the sale of the MSRs themselves and approximately $300 million is related to the sale of servicing advances, PHH said.

According to PHH, the expected MSR proceeds exclude estimated transaction fees and expenses of approximately 5% of the of value of the MSRs, and represent a valuation of 84 basis points on the total unpaid principal balance.

Part of the reason for the sale, it appears, is the losses that PHH is taking on its MSR-related hedges, including those related to its Ginnie Mae MSR portfolio.

According to PHH, the company experienced aggregate realized and unrealized losses of approximately $135 million so far in the fourth quarter, and PHH said that it expects to terminate its related hedge positions in conjunction with the signing of the sale agreement.

But PHH isn’t leaving the mortgage servicing business behind entirely, at least not yet.

The company said that as part of the deal, it is entering into a subservicing agreement with New Residential, through which PHH will subservice the underlying 480,000 mortgage loans for an initial period of three years, subject to “certain termination provisions.”

The company said that the initial sale in this deal is targeted for closing during the second quarter of 2017.

The company said that it plans to use “substantially all” of the proceeds from the transaction to repay PHH’s senior unsecured notes and borrowings under the company’s servicing advance facility and to pay taxes.

When the initial sale under the transaction closes, PHH said that it expects it will be required to make an offer to purchase its senior unsecured notes, under the terms of its bond indentures, at a purchase price equal to 101% of the outstanding principal amount.

“We are pleased to announce that we have concluded these agreements with New Residential and thank them for their efforts,” PHH President and CEO Glen Messina said.

“This transaction is an important next step in our strategic review process and enables PHH to efficiently monetize its remaining owned MSR portfolio at the highest available price while maintaining the flexibility to maximize the value of our subservicing platform,” Messina added. “We are continuing to evaluate the strategic options for our remaining business platforms and remain on track to complete the strategic review by the end of January 2017.”

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