MReport May 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 5 of 67

4 | TH E M R EP O RT MTECH Forging Partnerships From new acquisitions and clients to high customer satisfaction levels and new technology platforms, the industry had a busy first quarter. Ocwen Signs $360 Million Deal to Acquire PHH Corp UNDER THE AGREEMENT, OCWEN WILL ACQUIRE ALL OUTSTANDING SHARES OF PHH. O cwen Financial Corpora- tion, an Atlanta-based financial services holding company, announced a definitive agreement under which it will ac- quire all of the outstanding shares of PHH Corporation, a mortgage platform with established servic- ing and origination recapture capabilities, for approximately $360 million in cash. The purchase price represents a 35 percent discount to PHH's GAAP book equity at the end of 2017. On a combined basis, as of December 31, 2017, the company would service 1.9 million loans with an unpaid principal balance of $328 billion, and originate over $3 billion of residential mortgage loans, includ- ing reverse mortgages annually. Ocwen projects that the increased size and scale of the combined company should create various strategic and financial benefits, including: accelerating Ocwen's transition to an industry-leading servicing platform;improving servicing and origination margins through improved economies of scale;reducing fixed costs (on a combined basis) by eliminating redundant corporate overhead and public company-related costs; and providing a superior foundation to eventually enable the combined servicing platform to resume new business and growth activities to offset portfolio runoff. It is anticipated that at closing, which is expected to occur dur - ing the second half of 2018, there will be sufficient available cash on PHH's balance sheet to enable $260 million of the $360 million purchase price to be funded out of PHH's available cash, while providing for sufficient additional liquidity to fund its operations going forward. Ocwen will also assume $119 million of PHH's outstanding corporate debt. "We are very pleased to an- nounce the proposed acquisition of PHH, a leading non-bank servicer. PHH is a high-quality servicer with complementary capabilities and business lines to Ocwen, making it a great strategic match for us," said Ron Faris, President and CEO of Ocwen. "In addition to provid - ing significant scale benefits, this transaction gives us the opportu- nity to migrate to their existing BlackKnight LoanSphere MSP servicing platform more quickly and with less risk than had we just implemented the system our - selves. We are also excited by the opportunity to welcome the PHH employees to the Ocwen family and by the opportunity to bring our industry-leading and innova - tive loss mitigation capabilities to existing PHH servicing customers currently struggling with their mortgage payments." Robert B. Crowl, President and CEO of PHH, said, "We are pleased to have reached an agree - ment with Ocwen, and we look forward to working with them to bring this transaction to a success- ful close. We are excited by the opportunity to build a stronger combined company for our servic- ing and subservicing clients, our borrowers, and our employees." PennyMac Partners with Nordis Technologies NORDIS WILL LOOK AFTER PENNYMAC'S PRINT AND MAIL SERVICES FOR ITS SERVICING CLIENTS. N ordis Technologies, based in Coral Springs, Florida, has secured a major new customer, PennyMac Financial Services Inc., a leading national residential mortgage lender and loan servicer, for its print and mail services. Nordis is ramping up production and distribution of loan servicing communications to PennyMac's more than 1 million customers. It expects to handle hundreds of thousands of pieces a month for

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport May 2018