Ocwen to buy Texas Capital’s correspondent business
Texas Capital Bank is selling its entire $14 billion book of mortgage servicing rights to PHH Mortgage, a subsidiary of Ocwen Financial Corp, for a “modest profit.” The Dallas-based bank, one of the country’s largest correspondent lenders, also announced that the deal would represent an exit from the correspondent lending sector.
According to a news release, 200 new correspondent sellers are expected to be added to PHH’s client base, and around 60,000 loans will be transferred to the PHH Mortgage servicing platform in the third quarter.
Texas Capital’s correspondent lending business originated approximately $2.4 billion of volume in the fourth quarter, slightly less than Ocwen’s correspondent lending arm during the same period. The transaction is expected to close in the second quarter of this year.
“Our agreements to acquire their Correspondent Lending business and $14 billion in bulk MSRs are major steps toward achieving our goal of adding at least $100 billion in new servicing in 2021,” said Glen Messina, president and CEO of Ocwen.
Ocwen also scored a different kind of victory this week. The lender and servicer prevailed in a lawsuit brought by the CFPB, which alleged that Ocwen failed “borrowers at every stage of the mortgage servicing process.” The lawsuit specifically claimed that Ocwen “botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.” It also alleged the firm “illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.”
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Ocwen said in a statement that the court’s March 4 decision granting summary judgment in Ocwen’s favor, along with the CFPB’s decision to drop its remaining claims, “is consistent with our belief that the Bureau’s allegations regarding Ocwen’s past servicing practices were without merit. Should the CFPB decide to file an appeal, Ocwen will continue to vigorously defend itself, as we have done throughout the course of this litigation.”
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