Ocwen Loan Servicing LLC, the mortgage servicing arm of Ocwen Financial Corp., and Walter Investment Management Corp. were jointly awarded the winning $3 billion bid in a bankruptcy court auction for the mortgage servicing and origination platform assets of Ally Financial's Residential Capital LLC (ResCap) unit.
As of March 31, ResCap was servicing over 2.4 million loans with an aggregate unpaid principal balance of approximately $374 billion, of which approximately 68% of the loans are owned, insured or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. Among the other entities that previously expressed interest in acquiring the ResCap assets were Fortress Investment Group's Nationstar Investment Group and Warren Buffett's Berkshire Hathaway.
Under the joint bidding arrangement, Walter Investment Management Corp. will acquire the Fannie Mae mortgage servicing rights portion of ResCap's servicing portfolio, representing approximately $50.4 billion in unpaid principal balance, as well as the origination and capital markets platform.
‘The opportunity to acquire the ResCap Origination platform will allow us to profitably achieve additional scale in our originations business,’ says Mark J. O'Brien, chairman and CEO of Walter Investment. ‘We are excited by the opportunities the origination and capital markets platforms and people bring to our business. These opportunities are indicative of the growth and acceleration of prospects in our $500 billion active pipeline.’
‘The acquisition of ResCap significantly advances Ocwen's planned growth initiative to add high return servicing assets to our portfolio and to expand our servicing capacity through retention of a significant portion of ResCap's high quality servicing organization,’ says William Erbey, Ocwen's executive chairman.
The sale is subject to an approval hearing before the bankruptcy court on Nov. 19.