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Mr. Cooper Completes Reverse Servicing Portfolio Sale to MAM

Mortgage servicing, origination and transaction-based services company Mr. Cooper Group announced on Friday that it had completed the sale of its reverse mortgage servicing portfolio – operating under the Champion Mortgage brand – to Mortgage Assets Management, LLC (MAM). As was the case when the transaction was announced this past summer, terms were not disclosed.

“We’re pleased to complete this sale, which allows us to continue on our path of rationalizing and simplifying the business model, in order to focus on the attractive growth opportunities in our core mortgage servicing and originations segments.” said Jay Bray, chairman and CEO of Mr. Cooper Group. “We believe this transaction is a positive outcome for our Reverse customers and the team members who have supported this business.”

Additionally, Mr. Cooper Vice Chairman, CFO and President Chris Marshall specified that the sale will only serve to improve the financial standing of Mr. Cooper.

“This transaction improves profitability and liquidity, simplifies our financial statements, and strengthens our capital ratios, which are now above our previously disclosed target of 15%,” Marshall said.

As noted at the time the sale was announced, this development is particularly notable due to the recent activity of MAM in the realm of reverse mortgage servicing. MAM emerged as the buyer of servicer Reverse Mortgage Solutions (RMS) in 2019, buying the company and its portfolio from its former parent Ditech Holding Corporation after a protracted, court-supervised process.

Also noted at the time, Marshall detailed that the decision about selling the Champion portfolio was not because reverse mortgage servicing endangered Mr. Cooper or depressed its profitability, but because the company sought to streamline its financial statements and instead accentuate what it aims to do with its core businesses.

“Measured from inception, Champion Mortgage has been a profitable operation for Mr. Cooper, but it is not a material driver of our business,” said Marshall this past summer of the Mr. Cooper Group/MAM deal. “This transaction strengthens our business model, simplifies our financial statements, and allows us to reallocate liquidity into our core operations. These benefits will contribute to even stronger momentum for Mr. Cooper.”

However, MAM recently sold off RMS to Ocwen Financial Services, parent company of PHH Mortgage Corporation and leading reverse mortgage lender Liberty Reverse Mortgage.

With the recent acquisition of the Champion Mortgage/Mr. Cooper Group reverse servicing portfolio, MAM has effectively re-entered the reverse mortgage servicing arena shortly after the sale of RMS, which itself was dogged by a lawsuit aimed at executives who helped to facilitate the original deal between MAM and RMS.

That suit was quietly settled before progressing to trial earlier this year, RMD has learned, ultimately culminating in the sale of RMS to Ocwen/PHH first made public this past summer.

Mr. Cooper has this year publicized the sale of other entities, including both Xome Valuations and Xome Field Services.

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