Ocwen Financial (OCN) Announces Agreement With Reverse Mortgage Solutions to Acquire Reverse Mortgage Servicing Platform
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Ocwen Financial Corporation (NYSE: OCN) (“Ocwen” or the “Company”), a leading non-bank mortgage servicer and originator, today announced that its wholly-owned subsidiary, PHH Mortgage Corporation (“PHH”), has entered into an agreement with Reverse Mortgage Solutions, Inc. (“RMS”) and its parent, Mortgage Assets Management, LLC (“MAM”), to acquire substantially all of the operations, assets and employees of the RMS reverse mortgage servicing platform. MAM is a subsidiary of investment funds managed by Waterfall Asset Management, LLC (“Waterfall”). The Company will also acquire all of the outstanding equity interests in the RMS Real Estate Owned business, REO Management Solutions, LLC (“REO”).
Under the terms of the agreement, subservicing contracts for the reverse residential mortgages currently subserviced by RMS would be assigned to PHH. As of March 31, 2021, RMS serviced approximately 35,000 reverse mortgages, or approximately $7.8 billion in unpaid principal balance. As part of the transaction, PHH expects to assume the vast majority of the RMS reverse servicing and REO employees and PHH will become the subservicer under a five-year subservicing agreement for reverse mortgages owned by RMS and MAM.
The aggregate purchase price is estimated to be approximately $12.4 million and will be subject to certain post-closing adjustments. The transaction is expected to close in the third quarter of 2021, subject to appropriate regulatory approvals and other customary closing conditions.
Glen A. Messina, President and CEO of Ocwen, said, “We are very pleased to announce the proposed acquisition of the RMS reverse mortgage servicing and REO platforms. The acquisition is expected to double our reverse servicing/subservicing portfolio and will provide us with a high-quality reverse servicing platform, experienced people and customized reverse technology. In addition to our current relationship with Waterfall across the reverse mortgage product spectrum, we are excited and honored to broaden our partnership with them through the long-term subservicing agreement and to support their asset growth and investment objectives in the reverse mortgage industry.”
Messina added, “Our Liberty Reverse Mortgage platform is one of the premier reverse mortgage lenders in the industry, and we believe this transaction complements our existing capabilities and further solidifies our leadership position. We look forward to closing this transaction, welcoming the RMS team, clients and customers to the Ocwen/PHH family, and continuing our long-term partnership with Waterfall.”
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