An offshore company formed to buy Ocwen Financial Corp. (OCN) mortgage servicing rights, opened down 3% its first day of trading Wednesday.

Home Loan Servicing Solutions priced its initial public offering of more than 13 million shares at $14.

The company is based in the Cayman Islands and will buy rights to servicing fees on roughly $16 billion in subprime loans, according to an agreement reached in February.

Ocwen Chairman William Erbey invested $10 million for shares of HLSS at the initial price.

Over the last year, Ocwen boarded subprime mortgages from Litton Loan Servicing, Saxon Mortgage Servicing, HomEq and other deals with JPMorgan Chase (JPM).

At Dec. 31, Ocwen serviced $102.2 billion in unpaid principal balance, of which nearly 28% was nonperforming. It is reviewing another $300 billion in further MSR purchases.

"Should the HLSS IPO be effective, Ocwen would begin to migrate to a fee-for-service model with lower leverage and lower balance sheet requirements," the company said in a filing. "The transaction could potentially make Ocwen and HLSS more competitive in bidding for servicing."