Nationstar Agrees to Acquire Mortgage Servicing Assets of ResCap – NMP Skip to main content

Nationstar Agrees to Acquire Mortgage Servicing Assets of ResCap

NationalMortgageProfessional.com
May 14, 2012

Nationstar Mortgage Holdings Inc. has announced that it has signed a definitive agreement to acquire certain residential mortgage servicing assets and other assets from Residential Capital LLC and related entities (ResCap) in connection with ResCap’s proposed asset sale pursuant to a plan under the U.S. Bankruptcy Code. Nationstar expects the acquired Mortgage Servicing Assets to total approximately $374 billion, including $201 billion in primary residential mortgage servicing rights (MSRs) and $173 billion in subservicing contracts, as measured by unpaid principal balances as of Feb. 29, 2012, approximately $1.8 billion of related servicing advance receivables and certain other complimentary assets. The transaction is expected to close in late 2012, subject to the conditions and auction process described below. Upon closing, the acquisition will make Nationstar the largest non-bank residential mortgage loan servicer and one of the largest residential loan originators in the nation. With this transaction, Nationstar anticipates adding more than 2.4 million customers to a customer base of more than one million, and growing its total servicing and sub-servicing book to approximately $550 billion. “We believe this transaction will cement Nationstar’s position as the nation’s pre-eminent non-bank mortgage servicer, and it reflects a record of servicing performance that has made us a partner of choice in a transforming industry,” said Nationstar CEO Jay Bray. “This potential transaction and our pending acquisition of servicing rights from Aurora represent terrific opportunities to acquire assets and operations from best-in-class servicers without the burden of certain legacy liabilities." The cash purchase price of the mortgage servicing rights and subservicing contracts would be approximately $700 million based on unpaid principal balances as of Feb. 29, 2012. The cash purchase price of the related servicing advance receivables would be approximately $180 million, net of financing, based on advance balances as of Feb. 29, 2012. Nationstar expects to enter into approximately $1.6 billion of advance financing facilities to fund the balance of the related servicing advance receivables. Approximately 68 percent of loans in the total portfolio (by unpaid principal balance) are owned, insured or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. “In a performance-based, customer-focused servicing model like Nationstar’s, the talent and experience of our people make the difference,” said Bray. “We expect that many employees from Aurora will join our U.S.-based workforce, and we look forward to working with many exceptional professionals from ResCap as part of the Nationstar team. Together, our overriding mission will be unchanged—to build on our heritage of providing our customers with exceptional service and the benefit of Nationstar’s extensive resources to help them achieve and preserve homeownership.” Nationstar will fund up to approximately $450 million of the MSR purchase price and cash purchase price for advances. Remaining funding is expected from proceeds of a co-investment by Newcastle Investment Corporation and other Fortress-affiliated entities, whereby Nationstar will sell the right to receive approximately 65 percent of the excess MSRs after receipt of a fixed basic servicing fee per loan. Nationstar will retain approximately 35 percent of the excess MSRs and all ancillary income associated with servicing the loans. Under the terms of the investment, to the extent that any loans in this portfolio are refinanced by Nationstar, the resulting mortgage servicing right will be included in the portfolio, subject to certain limitations. As contemplated by the agreement, ResCap has voluntarily filed a Chapter 11 petition in U.S. Bankruptcy Court and is seeking court approval to sell its Mortgage Servicing Assets in an auction process supervised by the court. Pursuant to the terms of the Agreement, Nationstar has agreed to serve as the “stalking horse” bidder for the auction of the Mortgage Servicing Assets. Nationstar’s bid is subject to superior offers solicited as part of the auction process as well as court and other approvals and conditions. Nationstar anticipates that the court will approve in mid-June the auction procedures and timeline for the sale of the Mortgage Servicing Assets and that the auction process will last approximately 90 days, during which time ResCap will solicit competing bids. If Nationstar is the successful bidder, then ResCap will seek court approval to sell the Mortgage Servicing Assets to Nationstar and the closing of the Transaction would be expected to occur in late 2012. The auction timing and process is subject to the court’s discretion and may change.
Published
May 14, 2012
Chairman Xu Sells Off Personal Assets To Avoid Default

The Evergrande saga continues as Chairman Xu Jiayin sells off 7 billion yuan ($1.1 billion) of his personal assets to prop up the deflating property giant.

Industry News
Nov 23, 2021
OptiFunder Secures $25 Million In Capital

OptiFunder, a warehouse management system provider for mortgage originators, raised $25 million in additional capital lead by Arthur Ventures, a growth capital firm focused on high-growth, founder-led and capital efficient B2B software companies.

Tech
Nov 23, 2021
Mortgage Company Donates $100K To High School In Memory Of Fallen U.S. Navy Corpsman

Cleveland-based CrossCountry Mortgage donated $100,000 to Milan Edison High School in memory of U.S. Navy Corpsman, Maxton W. Soviak, who died while assisting in the evacuation of Americans and refugees in Afghanistan in August.

Community
Nov 23, 2021
MISMO Seeks To Standardize Pre-Closing Title Data

Forming workgroup to focus on standardizing document datasets to streamline process and increase efficiency.

Industry News
Nov 23, 2021
Pandemic's Impact On Real Estate Around The World

Although the impact of the COVID-19 pandemic on the real estate industry has been well-documented within the United States, it’d be prudent to know how the global event impacted other countries as well. 

Industry News
Nov 22, 2021
Housing Market Potential Strengthens Modestly

First American Financial Corporation's Potential Home Sales Model for October 2021 reported that potential existing-home sales increased 0.1% month-over-month to 6.27 million, with household formation continuing to grow, largely driven by millennials.

Analysis and Data
Nov 22, 2021