According to a filing with the U.S. Securities and Exchange Commission on Monday, PHH Mortgage Corporation has closed the sale of nearly its entire Freddie Mac portfolio of mortgage servicing rights (MSR) to New Residential Mortgage, LLC—about 81,500 loans. New Residential picked up the portfolio for approximately $110 million. Of that sum, $101.5 million was attributable to the purchase rights for the Freddie Mac MSR portfolio and $8.5 million was for related servicing advances.
As pursuant of the agreement, PHH Mortgage and New Residential entered into a MSR Defense Agreement; PHH Mortgage will also be reimbursed by New Residential for any servicing advances the company makes on a weekly basis. PHH Mortgage will remain the subservicer for the portfolio for a term of three years.
The sale is the second of a three-phase move for PHH Mortgage to rid themselves of all MSRs associated with government-backed lenders. The mortgage company sold off their Ginnie Mac MSR portfolio to the Delaware-based limited liability company back in November of 2016. They expect to sell off their portion of Fannie Mae MSRs sometime in the third quarter of 2017, however nothing is set in stone.
This sale rides on the coattails of New Residential’s $950 million purchase of Citigroup’s servicing rights back for Fannie Mae- and Freddie Mac0back loans in January, as reported by Bloomberg. Those loans have an outstanding balance totaling $97 billion. Bloomberg is also reporting that New Residential has been aggressively acquiring mortgage servicing rights since the appointment of CEO Michael Nierenberg.