PHH closes sale of Freddie MSRs to New Residential

PHH Corp. completed the sale of its Freddie Mac mortgage servicing rights portfolio to New Residential Corp. on June 16.

However, Mount Laurel, N.J.-based PHH's sale of the Fannie Mae MSR portfolio to New Residential is expected to take place in the third quarter, according to an 8-K filing with the Securities and Exchange Commission.

As part of the sale, PHH entered into an MSR defense agreement with New Residential on June 16. PHH will be allowed to solicit these loans for refinance. If there is a refi, the MSR created for the new loan will be sold to New Residential.

Total proceeds for the Freddie Mac portfolio were $110 million, which included the $101.5 million purchase price and an additional $8.5 million attributed to related servicing advances, the filing said.

There were MSRs for 451,860 loans to be sold to New Residential, with an unpaid principal balance of $67 billion as of March 31, according to PHH's first-quarter 10-Q filing.

The Freddie Mac portfolio consisted of 81,500 loans, for which PHH has been retained as the subservicer for a three-year period, the 8-K filing said.

On May 31, PHH shareholders voted to approve the MSR sales along with the sale of PHH Home Loan's assets and liabilities to an affiliate of Guaranteed Rate.

When the deal was announced, total proceeds (which included the Fannie Mae portfolio) were expected to be $912 million.

Lakeview Loan Servicing acquired a $10.2 billion Ginnie Mae MSR portfolio in the first quarter from PHH, plus an additional $1 billion of Ginnie Mae servicing rights in May, for total proceeds of $93 million.