Ocwen Financial Corp. Wednesday morning disclosed that it has agreed to buy Homeward Residential Holdings and all its mortgage affiliates for roughly $588 million in cash and $162 million in preferred stock.
The sale will create a $170 billion residential servicer that will rank ninth nationwide, according to figures compiled by National Mortgage News and the
It also gets Ocwen back into the origination business, a space it has avoided for several years.
The sale effectively takes Wilbur Ross and his firm out of the mortgage business except a few isolated investments in depositories and a mortgage company called CMC. (Ross entered the mortgage business late last decade by buying large servicing packages from two troubled mortgage banking firms, Option One and American Home Mortgage in Long Island.)
Ocwen, whose stock is trading near its 52-week high, services roughly $96 billion in subprime loans. Homeward Residential services about $74 billion.
Ocwen is one of
"The acquisition of Homeward significantly advances Ocwen's twin strategic growth initiatives to add high-return servicing assets to its portfolio and expand origination capacity to provide for a sustainable source of future growth," said Ocwen's executive chairman William Erbey in a prepared statement. "Homeward brings with it a global servicing platform as well as a growing origination business that is already operating at a $10 billion annual run-rate after launching in late 2011."
