PHH Mortgage Corporation, the company for which leading reverse mortgage lender Liberty Reverse Mortgage is a subsidiary, announced this week that it has added $56 billion in subservicing unpaid principal balance (UPB) over the course of 2021.
The new figure includes awards from six new subservicing clients, significantly expanding this portion of the company’s business according to the announcement.
“[This makes for PHH’s] most successful year in terms of both client acquisition and portfolio growth since Ocwen acquired PHH in 2018,” the company said. “The new subservicing volume spans forward, reverse and small-balance commercial clients. PHH’s subservicing business was able to capitalize on several industry and market trends last year. These include the dramatic fluctuations in MSR values due to the COVID-19 pandemic, which prompted many originators to retain MSRs; record-high origination volumes adding pressure to in-house servicing departments; and ongoing re-evaluations of subservicers’ performance.”
Reverse mortgage-specific figures were not broken out. PHH added $152 billion in total servicing UPB in 2021, marking a 166% increase and finished 2021 servicing 1.4 million loans with a total UPB of $268 billion. Entering into 2022, PHH had customer commitments for both forward and reverse mortgage subservicing totaling nearly $35 billion in UPB, which is expected to board during the first half of 2022.
“Last year was a record year in terms of wins and volume for our subservicing business,” said George Henley, EVP and chief growth officer of PHH. “We won business from mortgage banks, regional banks, private investors and MSR holders of varying sizes. Our clients have recognized PHH as a superior alternative to other subservicers in the market and have entrusted us to provide an immediate lift for their valued customers.”
In 2021, Ocwen Financial Corporation (NYSE:OCN), parent company of Liberty and PHH, posted its first annual profit since 2013 but a slide in earnings in the fourth quarter. The company also sees its current and future interests in the reverse mortgage business through Liberty and its recently-closed acquisition of Reverse Mortgage Solutions (RMS) as a critical factor in its operations according to a recent earnings call.
“We’re excited about our reverse sub-servicing platform,” said Ocwen CFO June Campbell in February. “It uniquely positions our reverse servicing business for accelerated growth this year. [W]e expect $11 million in higher reverse mortgage revenue from boarded and committed volume this year, $25 billion of the $27 billion in UPB are under a five-year sub-servicing agreement. With scale and optimized cost structure, we expect the acquisition to be accretive to our reverse servicing business in the second half of the year, achieving $5 million in adjusted pre-tax income by the fourth quarter.”