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Ocwen Financial Corporation and Nationstar Mortgage Holdings have agreed in principle to the sale by Ocwen of the mortgage servicing rights on an Agency portfolio with approximately $25 billion in unpaid principal balance, according to an announcement on Ocwen's website on Tuesday. There are approximately 142,000d residential mortgage loans owned by Fannie Mae and Freddie Mac in the portfolio. Both companies expect the transaction to close by the middle of the year.
This will be the second time in as many months that Ocwen has announced an MSR sale on an Agency portfolio of residential loans to Dallas, Texas-based Nationstar. In February, Ocwen announced its intention to sell the MSR on a portfolio of about 81 thousand performing residential loans owned by Freddie Mac with a UPB of about $9.8 billion to Nationstar. The transaction announced Tuesday was the fourth multi-billion sale of an Agency MSR portfolio announced by Ocwen in the last two months.
In the opening arguments on Tuesday morning for two cases in the U.S. Supreme Court to determine the legality of extinguishing, or "stripping off" an underwater second mortgage as unsecured debt for a debtor in bankruptcy, an attorney representing Bank of America contended that the high court should uphold a 1992 decision that outlawed stripping off while attorneys representing the debtors argued that the decision is irrelevant to these two cases. The Supreme Court is expected to make a ruling by June.
