Non-bank mortgage servicer and originator Onity Group, previously Ocwen Financial Corporation until a June re-brand, has entered into a letter of intent with Waterfall Asset Management to acquire reverse mortgage assets of Mortgage Assets Management, LLC, a subsidiary of investment funds managed by Waterfall.
“We are pleased to announce the proposed transaction with Waterfall,” said Onity Chair, President and CEO Glen Messina, in a press release outlining the group’s Q2 2024 results.
“We expect this transaction to be accretive to earnings and cash flows immediately upon closing, while strengthening our position in reverse servicing as a hedge to forward MSRs, providing incremental asset management opportunities, and improving our capital structure. MAM has been a valued subservicing client, and we look forward to closing the transaction with Waterfall and pursuing future business opportunities,” Messina added.
The transaction would include a reverse mortgage servicing portfolio, which is currently subserviced by PHH Mortgage, with a projected unpaid principal balance of approximately $3 billion. The company intends to issue $51.7 million in par value of new, non-convertible, cumulative preferred stock to Waterfall in consideration of the acquisition, which is expected to close this year.
