TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/488965
42 | Th e M Rep o RT O r i g i nat i O n S e r v i c i n g a na ly t i c S S e c O n da r y m a r k e t SERVICING The laTesT amendment to its $1.3 billion Senior Secured Term Loan to re- move certain restrictions on asset sales and permanently increase a financial covenant. To repay cash received from asset sales, Ocwen agreed to an accelerated repay- ment schedule. "We are pleased with the actions of our term loan inves- tors. They have been supportive of Ocwen and recognize the importance and benefit of execut- ing on our strategy," Faris said. "Additionally, their willingness to enter into an amendment with Ocwen is an affirmation that the company is, and always has been, in compliance with all of its SSTL covenants." Ocwen's regulatory troubles over the last year have been well- documented. The Atlanta-based nonbank mortgage servicer agreed to a $150 settlement with the New York Department of Financial Services in December 2014. That settlement included the depar- ture of chairman Bill Erbey, who founded the company more than 30 years ago. Ocwen to Sell $45 Billion Worth of agency- Performing loans The latest transaction is consistent with ocwen's stated goal of shedding some of its agency portfolio amid regulatory challenges. O cwen Financial signed a letter of intent to sell the mortgage servicing rights (MSRs) for $45 billion worth of agency performing loans, according to an announcement posted on Ocwen's website last month. The portfolio consists of about 277,000 performing loans owned by Fannie Mae. The approximate unpaid balance of the loans is $45 billion. According to the an- nouncement, Ocwen expects the deal to close by the middle of the year. The transaction is subject to approval from Fannie Mae as well as the enterprise's conservator, the Federal Housing Finance Agency, and other customary conditions. The announcement came less than a week after Ocwen an- nounced it was selling an MSR portfolio worth $9.8 billion in performing agency loans to Dallas- based Nationstar. That portfolio contained approximately 81,000 performing residential mortgage loans owned by Freddie Mac. These two transactions together represent approximately $55 bil- lion in unpaid principal balance for which Ocwen agreed to sell the MSRs. Both transactions are expected to be completed in the next six months. According to Ocwen's announcement, the Atlanta-based servicer expects the two transactions will generate approximately $550 million in proceeds and "accelerate Ocwen's strategy to reduce the size of its agency-servicing portfolio." Ocwen did not name the buy- er in the $45 billion transaction announced last month, though Ocwen President and CEO Ron Faris did say a week earlier that the Atlanta-based servicer was looking forward to "exploring additional MSR transactions with Nationstar." Also announced last month, Ocwen entered into an