New Residential Investment buys Ditech Financial for .2 billion
The sell-off of Ditech Holding’s two main subsidiaries is now complete.
Just one day after selling Reverse Mortgage Solutions to Mortgage Assets Management, the nonbank formerly known as Walter Investment Management sold off its forward mortgage business Ditech Financial to New Residential Investment for $1.2 billion.
Specifically, New Residential acquired “select assets from
Ditech Holding Corporation and Ditech Financial.”
According to New Residential, those assets included Ditech’s
forward Fannie Mae, Ginnie Mae and non-agency mortgage
servicing rights portfolio, which carried an aggregate unpaid principal balance
of approximately $62 billion as of Aug. 31, 2019.
New Residential is also acquiring the servicer advance
receivables relating to those MSRs and “other assets core to the forward
origination and servicing businesses.”
As part of the deal, New Residential will also take over
“certain” Ditech offices and add approximately 1,100 Ditech employees into the
fold to support the “increase in volume to its existing origination and
The total price tag for the acquisition is $1.2 billion,
which New Residential is paying for with financing facilities and cash on hand.
“We have spent the last number of months preparing for the close of this acquisition and structuring a robust transition plan,” said Michael Nierenberg, chairman, CEO, and president of New Residential. “We are excited to execute on our plan and see tremendous potential for creating value across our business.”
The acquisition is just the latest in a long string of such deals for New Residential, which is managed by an affiliate of Fortress Investment Group, the global investment giant that was acquired nearly two years ago by Japan’s Softbank Group for $3.3 billion.
Last year, for example, New Residential acquired Shellpoint Partners, a mortgage vehicle that is owned in part by Lewis Ranieri’s Ranieri Partners.
Ranieri, considered to be the father of mortgage securitization, helped found Shellpoint in 2010. The company is the parent company of several subsidiaries, including mortgage lender NewRez, Shellpoint Mortgage Servicing, title and settlement services provider Avenue 365, and eStreet, an appraisal management company.
Beyond that, the company also bought nearly all of CitiMortgage’s mortgage servicing rights in a deal announced in 2017.
New Residential also bought up some of HomeStreet Bank’s MSR portfolio when the company moved away from mortgages earlier this year.
As for Ditech Holding, the sale completes the company’s dissolution of its mortgage assets as it works its way through its second bankruptcy in 14 months.
“We are pleased to complete this value-maximizing sale that
enables Ditech Financial to continue serving customers and homeowners as we
transition to the new servicers,” said Thomas Marano, chairman of the board and
CEO of Ditech Holding. “We know the team at New Residential well and have
worked closely with them to ensure a smooth transition for customers. I would
like to thank our employees for their hard work and dedication to serving our
customers throughout this process.”