Mr. Cooper on Monday announced the sale of its reverse mortgage servicing portfolio, exiting the business that allows for home equity withdrawal by borrowers age 62-plus.
The divestiture of the Champion-branded business to Mortgage Assets Management reduces the unpaid principal balance of Mr. Cooper’s servicing portfolio by $16 billion. It also decreases Mr. Cooper’s balance sheet by $5 billion in federally insured Home Equity Conversion Mortgages and other assets. (HECMs are the dominant form of reverse mortgage.)
Mr. Cooper does not expect the undisclosed consideration it’s receiving for the sale is to have a material impact on its second quarter results. However, it will help the company streamline and focus its operation as it moves into the second half of the year. Servicing work in general could pick up in the next six months due to the pending end of most foreclosure bans, and the evolution of other pandemic-related relief measures. As a result, resources are being shifted to handle customers in distress.
“From a strategic standpoint, this is a major transaction — we can now completely focus on our core origination and servicing segment,” Mr. Cooper Chairman and CEO Jay Bray said in a press release.
The Champion Homes portfolio announcement coincided with a separate one about the completion of Mr. Cooper’s Title365 sale to Blend. It also comes a few weeks after a competitor, Ocwen, purchased the assets of Reverse Mortgage Solutions from MAM.
Mr. Cooper’s move suggests that it may be paring back its exposure to the reverse mortgage servicing business as Ocwen invests more heavily in it. Mr. Cooper will list Champion as a discontinued operation after the sale.
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