Ocwen Financial Corp. and private equity firm WL Ross & Co. agreed on Oct. 3 that Ocwen will buy Homeward Residential Holdings. The purchase includes Homeward's various residential mortgage loan servicing and origination operating units for roughly $588 million in cash and $162 million in Ocwen convertible preferred stock.

Homeward services roughly 422,000 mortgage loans with an aggregate unpaid principal balance of more than $77 billion.

Its loan origination business covers correspondent and retail lending and is focused just on high-quality agency conforming mortgages. These mortgages are mostly securitized by Freddie Mac and Fannie Mae.

Homeward was organized by WL Ross & Co. in 2007 and is the result of several major platform combinations: American Home Mortgage Servicing, Option One Mortgage Co. and a large servicing portfolio from Citi Residential Lending.

Ocwen’s purchase of Homeward is expected to be immediately accretive to earnings per share.

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