Ocwen Financial Corporation’s (NYSE: OCN) $45 billion portfolio of mortgage servicing rights (MSRs) is being sold to JPMorgan Chase & Co. (NYSE: JPM), reports Bloomberg, citing a person familiar with the transaction.
Reports of the transaction, which consists of approximately 277,000 performing agency loans owned by Fannie Mae, surfaced earlier this month when Ocwen said it had signed a letter of intent March 2 with a buyer on the sale of these MSRs.
Subject to a definitive agreement, as well as approvals by Fannie Mae and the Federal Housing Finance Agency, Ocwen expects the transaction to close by mid-year and the loan servicing to transfer over the course of the second half of 2015.
The sale aligns with Ocwen’s plan to sell agency MSRs relating to approximately $55 billion of unpaid principal balance in the next six months, which the company also announced March 2.
Last month, Ocwen—parent company of reverse mortgage lender Liberty Home Equity Solutions—sold a $9.8 billion MSR portfolio to Nationstar Mortgage Holdings, Inc. (NYSE: NSM), which consisted of about 81,000 performing loans owned by Freddie Mac.
Ocwen anticipates these transactions will generate approximately $550 million of proceeds over the next six months and “accelerate Ocwen’s strategy to reduce the size of its agency servicing portfolio,” the company stated in an release.
For JPMorgan, the deal with Ocwen brings its portfolio for overseeing billing, collections and foreclosures on U.S. mortgages to nearly $1 trillion, a threshold it last surpassed in the fourth quarter of 2013.
As of December 31, 2014, JPMorgan’s $948.8 billion loan servicing portfolio trailed behind only Wells Fargo & Co.’s $1.75 trillion, according to data compiled by Bloomberg.
Read more at Bloomberg.
Written by Jason Oliva