Ocwen Financial Corp.’s PHH Mortgage subsidiary has entered into an agreement with Reverse Mortgage Solutions Inc. (RMS) and its parent, Mortgage Assets Management LLC (MAM), to acquire substantially all of the operations, assets and employees of the RMS reverse mortgage servicing platform.
The company will also acquire all of the outstanding equity interests in the RMS real estate owned business, REO Management Solutions LLC.
Under the terms of the agreement, subservicing contracts for the reverse residential mortgages currently subserviced by RMS would be assigned to PHH. As of March 31, 2021, RMS serviced approximately 35,000 reverse mortgages, or approximately $7.8 billion in unpaid principal balance.
As part of the transaction, PHH expects to assume the vast majority of the RMS reverse servicing and REO employees, and PHH will become the subservicer under a five-year subservicing agreement for reverse mortgages owned by RMS and MAM.
The aggregate purchase price is estimated to be approximately $12.4 million and will be subject to certain post-closing adjustments.
“The acquisition is expected to double our reverse servicing/subservicing portfolio and will provide us with a high-quality reverse servicing platform, experienced people and customized reverse technology,” says Glen A. Messina, president and CEO of Ocwen.
The transaction is expected to close in the third quarter.