Following through on a deal disclosed two months ago, Ocwen Financial Corp. is closing on the sale of mortgage servicing rights on Fannie Mae loans.
A March 2 announcement from Ocwen indicated that it intended to sell servicing on Fannie Mae residential loans.
The sale was just one of a number of steps that were taken in an attempt to shore up liquidity.
The transaction was
subject to approval by both the secondary lender and its regulator, the Federal Housing Finance Agency.
Ocwen said Monday that the deal is done.
The buyer in the transaction is
JPMorgan Chase & Co.
“The agreement is now signed and the necessary approvals have been obtained,” an Ocwen statement said. “This sale to Chase furthers Ocwen’s corporate strategy of reducing the size of the company’s agency servicing portfolio,” a news statement said.
A separate announcement from Chase indicated that it will acquire MSRs on 266,000 “high-quality” Fannie Mae mortgages for $45 billion from Ocwen Loan Servicing LLC.
Chase sees an opportunity in the investment.
“Buying this prime servicing book will improve the quality of our servicing portfolio and will help drive a stronger and less volatile mortgage business,” Chase Mortgage Banking CEO Kevin Watters said in the statement. “We expect the portfolio, in addition to lower delinquency rates overall, will help improve the value of our business.”
Chase previously reported a third-party mortgage servicing portfolio of $723.5 billion as of March 31. In addition, an analysis of its financial statements indicates that it owned $191.7 billion in residential assets outright.
At Ocwen, the primary mortgage servicing portfolio ended the first quarter at $331.9 billion.
The Atlanta-based company
finally filed its delinquent Form 10-K for 2014 with the Securities and Exchange Commission on Tuesday.
Ocwen additionally outlined Tuesday in an announcement a number of corporate initiatives that include improvement to operational and financial performance.
Today’s news release from Chase indicated that half of the
borrowers on the loans already have a financial product with Chase.
Chase said it will begin welcoming new borrowers this month, while the loan portfolio onboarding process will start on June 1.
