Ocwen Financial Corporation (NYSE: OCN), the parent company of reverse lender Liberty Home Equity Solutions, has officially closed on its $360 million-in-cash acquisition of mortgage lender and servicer PHH Corp.
The deal was first announced in February, and the West Palm Beach, Fla.-based Ocwen announced last week that all necessary approvals had been obtained for the deal to move forward. As part of the deal, Glen Messina, who was the CEO of PHH, has been named president and CEO of Ocwen.
With the purchase complete, the company can speed up the transition to Black Knight’s LoanSphere MSP servicing platform, a spokesperson for Ocwen told RMD in an e-mail. Upgrading from its REALServicing platform was a requirement for Ocwen to return to government compliance in many states after servicing restrictions were implemented over the past year.
In addition, the combination of the companies will allow for reduced servicing and origination costs, as well as lower fixed costs, as redundant corporate costs can be cut and consolidated.
“We believe our increased size and scale will create both strategic and financial benefits, including accelerating our transition to an industry leading servicing platform, reducing servicing, originating and overhead costs on a combined basis through the realization of $100 million in targeted cost synergies and improved economies of scale, and providing a foundation to enable Ocwen to resume new business and growth activities to offset portfolio runoff in the future,” Phyllis Caldwell, chair of Ocwen’s board of directors, said in a press release.
PHH is now a wholly owned subsidiary of Ocwen. Combined, the entity services 1.7 million loans with an unpaid principal balance of over $296 billion. The companies originated more than $3 billion of residential loans — including reverse mortgages — in 2017.
Written by Maggie Callahan