Ocwen Agrees to Buy Saxon

Mortgage & Real Estate

Ocwen Financial Corp., late Monday disclosed that it will buy Saxon Mortgage for almost $60 million in cash, a deal that will push its subprime servicing-related contracts to almost $110 billion.

Investment banking officials told National Mortgage News that Ocwen is expected to shutter most of the Saxon servicing platform, transferring all of the receivables to its existing operation.

The West Palm Beach, Fla.-based nonbank came to terms with Saxon’s owner, Morgan Stanley, last week, according to a new SEC filing.

According to figures compiled by NMN and the Quarterly Data Report, Ocwen controls $94 billion of subprime MSRs, ranking first nationwide. Saxon will add another $14 billion of nonprime MSRs to its portfolio. (In total, Saxon controls $26.6 billion of MSRs, some of them conventional in nature.)

Ocwen said it will finance the purchase “primarily with a combination of cash on-hand, cash generated through operations, available credit and two new committed servicing advance facilities.”

Those facilities are being funded by Wells Fargo Bank, and Credit Suisse AG.

The line of credit will total upwards of $1.1 billion, reflecting the large amount of servicing advances tied to the portfolio.

Daily Briefing | Tuesday, October 25, 2011

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