Ocwen Financial Corp., a top ranked specialty servicer, made it official over the weekend, agreeing to buy Litton Loan Servicing from Goldman Sachs for $264 million in cash, plus extras.
Moreover, sources told ASR's sister publication National Mortgage News recently that Ocwen is in the hunt for other acquisitions and has already made inquiries about buying Saxon Mortgage from Morgan Stanley & Co.
The Litton purchase makes Ocwen the nation’s largest subprime/specialty servicer with roughly $99 billion in mortgage servicing contracts on its books.
According to documents filed with the Securities and Exchange Commission, the “base purchase price” is $264 million (rounded) but Ocwen also will pay $337.4 million “to retire a portion of the outstanding debt on an existing advance facility” currently provided by an affiliate of Goldman with Litton entering into “a new facility to finance approximately $2.47 billion of servicing advances associated” with the task of processing loans.
Certain representations and warranties were provided by both parties. If the sale does not close by Nov. 1, the deal will be terminated.
According to figures compiled by NMN and the Quarterly Data Report, Ocwen ranks second nationwide among subprime/specialty servicer with $58 billion in receivables. Litton ranks fifth with $41 billion.
Goldman began shopping Litton around late last year. The investment banker bought Litton in late 2007 from the struggling C-BASS LLC. No purchase price was ever disclosed on the sale.