Now that the dust has settled (sort of) on Ocwen Financial’s purchase of $365 billion of servicing rights from Residential Capital Corp., what of Home Loan Servicing Solutions? HLSS, as you might recall, was spun off by Ocwen in March, raising $184 million in proceeds. It appears that its sole reason for being is that gives Ocwen a way to monetize its MSRs. Here’s my theory: Ocwen can’t recognize the true asset value of its MSRs – but if it sells the product to a third-party (HLSS) then it can. HLSS is the owner of the MSRs and Ocwen acts as the subservicer. In a recent SEC filing HLSS notes: “We pay Ocwen a monthly base fee equal to 12% of the servicing fees collected each month.” HLSS is incorporated in the Cayman Islands (for tax purposes) and as NMN readers know quite well, Ocwen has thousands of its servicing workers housed in India – where white collar labor is cheaper.
ResCap, Ocwen Financial -- and HLSS?
OCT 31, 2012 12:04pm ET
You must be registered to post a comment. Click here to register.
Already registered? Log in here
- NTC Hits Industry Milestone for Electronic Recordation
- IDS Launches Mortgage Compliance Resource Center for Doc Prep Clients
- NTC Snags Third Inc. 5000 Award, Places Number 2,097 on List of Fastest-Growing Companies
- Equifax Further Streamlines Lenders' Mortgage and Home Equity Origination Pipelines
- Property Reports Made EasyNationwide Title Clearing, Inc. Revamps Website, Online Ordering Available