Mr. Cooper has signed a definitive agreement with a Bayview Asset Management subsidiary to buy servicing of approximately 140,000 residential loans and add more than 500 employees to its team.
The subsidiary, Community Loan Servicing, will retain its name and commercial servicing operations under Bayview’s ownership. Financial terms of the transaction were not disclosed.
The Bayview unit’s expertise in handling distressed loans was an appealing factor in the deal for mortgage-servicing giant Mr. Cooper. The transaction also may reflect a trend of asset management firms changing their tack due to the relatively small amount of sub-performing residential product emerging from the pandemic. The deal comes not long after Altisource Asset Management announced that it would be repositioning itself to pursue opportunities in nontraditional residential loans and crypto-enabled ATMs.
“This transaction furthers our strategic goals with additional portfolio growth and expanded default servicing capabilities,” Mr. Cooper said in an emailed statement. “With the addition of the CLS team and their platform, we will be in an even better position to help homeowners who need extra support.”
Mr. Cooper expects the acquisition to close and officially on-board the new employees in the second quarter if it’s able to obtain customary approvals that are currently pending.
Acquisition activity in the mortgage market is expected to pick up as rates rise, putting pressure on profitability that could lead to consolidation.
Mr. Cooper also recently purchased a 20% stake in mortgage technology provider Sagent in exchange for certain intellectual property rights related to the servicer’s cloud-based platform.