Ocwen Financial Corp. said it paid $1.196 billion, or 7.4% less than originally planned, when it closed on its purchase of HomEq Servicing Corp., North Highlands, Calif., citing runoff in the company's securities and whole loan portfolio.
The West Palm Beach-based specialty servicer said the loans and receivables it "boarded" from HomEq came to $22.4 billion, which is $5.6 billion or 20.2% less than the amount disclosed in a June filing with the Securities and Exchange Commission.
Of the $22.4 billion, $2 billion are whole loans, the rest securitizations.
In a new SEC filing, Ocwen called the run-off "normal." HomEq, a servicer of mostly subprime mortgage assets, was owned by Barclays Bank. The sale closed on September 1.
Ocwen paid for HomEq by issuing debt and using equity: "approximately $852.6 million was funded by notes issued by a structured servicing advance financing facility and $344.1 million consisted of equity and money borrowed pursuant to a senior secured term loan facility."
HomEq has servicing platforms in Sacramento, Calif., and Raleigh, N.C. Ocwen recently disclosed that it will shutter the Raleigh platform, putting the center's 242 full timers out of work. Roughly 900 workers will lose their jobs at the Sacramento facility. Ocwen has a large call center operation in India.