Ocwen Financial Corp. has reached an agreement to acquire a subprime servicer, potentially making it a contender for a top-ten position among the biggest mortgage servicers in the country.
A news release Monday indicated that Ocwen has agreed to acquire Saxon Mortgage Services Inc. from Morgan Stanley.
The cost of the deal is $59.3 million. Ocwen also has to pay $1.4 billion for servicing advance receivables that are outstanding.
The transaction is scheduled to close in the first-quarter 2012.
Morgan Stanley Mortgage Capital Inc. acquired Saxon Capital Inc. in December 2006. At the time, Morgan Stanley said that acquiring Saxon “facilitates our goal of achieving vertical integration in the residential mortgage business, with ownership and control of the entire value chain, from origination to capital markets execution to active risk management.”
Saxon was spun off from Dominion, a Virginia-based energy company, in 2001.
Ocwen, which serviced around $74 billion, recently acquired Litton, which serviced $41 billion. In its third-quarter earnings report released Monday, Ocwen said that its mortgage servicing portfolio including the Litton loans stood at $106.1 billion as of Sept. 30.
With the acquisition of Saxon, which serviced $26.6 billion as of June 30, Ocwen’s total servicing portfolio is around $145 billion — putting it in contention with top-10 servicers like OneWest Bank, SunTrust Bank Inc. and PHHÂ Corp.
Ocwen already sub-services $10.9 billion of Saxon’s portfolio.
The deal also includes around $12.9 billion of loans that Saxon sub-services for Morgan Stanley and others.
