Lehman Brothers Holdings has completed the sale of its Aurora Bank unit, which concludes "a process that successfully avoided a potentially costly government resolution process of Lehman's two banks and that will ultimately yield significant recovery value for the Lehman creditors," a release from the bank said.
Lehman's release added that after an "extensive marketing process" that started more than a year ago with Aurora, it decided to breakup its subsidiary's business lines and do an individual disposition of the unit's different asset portfolios via a series of sales.
Lehman said that over the last months, Aurora's residential loan portfolios were sold to three separate purchasers; the commercial loan portfolios were sold to a single purchaser; the commercial servicing assets were sold to Ocwen Financial Corp.; the residential servicing assets were sold to Nationstar Mortgage; and its customers' deposits were transferred to New York Community Bank.
A Dow Jones report said that Lehman expects that these sales, in addition to an earlier sale of the bank's Woodlands Commercial Bank unit, will raise roughly $1.5 billion for its bankruptcy estate. Proceeds from the Woodlands sale should be available for distribution to creditors in 2012 while Aurora's continued wind-down can potentially delay distribution of its sale proceeds for up to several years, Dow Jones reported.
In a separate press release,Nationstar Mortgage Holdings announced today that its unit Nationstar Mortgage has completed the purchase of roughly $63.7 billion in residential mortgage servicing rights as well as certain other assets from Aurora and its wholly owned subsidiary Aurora Loan Services. The release said that the Aurora portfolio comprises roughly 75% nonconforming loans in private-label securitizations and about 25% conforming loans in GSE pools.
With this purchase, Nationstar has increased its servicing book to roughly $177 billion. Nationstar funded a part of the MSR purchase price using the proceeds of a 65% co-investment by Newcastle Investment Corp.
Previously, on May 31 Ocwen completed its acquisition of Aurora's commercial servicing rights portfolio comprising 3,316 loans with a total principal balance of roughly $1.8 billion.