Ocwen Financial Corp. (NYSE: OCN) today announced it has closed a deal to purchase Liberty Home Equity Solutions from Genworth Financial (NYSE: GNW). In the transaction, first announced in October, Ocwen agreed to purchase Genworth’s reverse mortgage business for $22 million in cash.
Under the new ownership, Liberty will continue to offer reverse mortgage products through its retail, wholesale and correspondent channels.
Liberty recently rose to become the top lender for reverse mortgage volume in March, according to data from the Department of Housing and Urban Development.
“Liberty is the industry leader in helping seniors secure their retirement with strong customer-service and superior quality, said Ronald Faris, Chief Executive Officer of Ocwen. “We believe this promising market offers enormous long-term growth potential, and this purchase positions Ocwen to capture that growth.”
The transaction positions Liberty to become one of the largest reverse mortgage lenders and servicers in the business, said Liberty’s CEO Pete Engelken.
“We are very excited to complete this transaction and become a part of one of the largest mortgage servicing and origination companies in the industry,” Engelken said. “Together we will be able to help even more seniors with home equity retirement income solutions, including FHA and proprietary products.”
In a recent company performance report, Ocwen execs said the industry has strong growth potential.
“Where reverse mortgage lending is not large now, it has substantial growth potential in the future,” said Ocwen Chairman, Bill Erbey at the time.
Genworth originally entered the reverse mortgage business when it acquired Liberty Reverse Mortgage in 2007 for $50 million in cash. It recently underwent a name change from Genworth Financial Home Equity Access to Liberty Home Equity Solutions in early 2013.
Ocwen has recently secured its position as a top mortgage servicer through the acquisitions of billions of dollars in mortgage servicing rights including rights formerly owned by Residential Capital, LLC (ResCap), and the residential mortgage servicing and origination divisions of Homeward Residential, Inc.
Written by Elizabeth Ecker