Green Tree to Buy Origen's Servicing
Origen Financial, a manufactured housing lender, has agreed to sell its servicing platform and related assets to Green Tree Servicing.
The deal includes the transfer of approximately $1.6 billion of manufactured housing loans.
While terms of the transaction were not released, Origien said it will use proceeds from the sale to retire a $15 million loan secured by the servicing assets, partially repay a $46 secured loan facility and for working capital.
As part of the sale, Green Tree will assume the lease for Origen's Forth Worth, Texas, servicing facility.
Origen, battered by difficult market conditions, previously said that it has suspended origination of new loans for its own portfolio and sold recently originated but unsecuritized loans at a loss. The company has also had to write down assets. "With the agreement to sell our servicing platform, we are now focused on trying to sell our origination platform assets and right-size our employee and cost structure to accommodate the continued management of our $1 billion securitized loan portfolio," said Ronald Klein, Origen's CEO.
In March, Origen sold a portfolio of unsecuritized loans for $155 million, using the proceeds to pay off its warehouse facility. The company also disclosed that its accounting firm, Grant Thornton, had raised doubts about Origen's ability to continue as a "going concern" in its annual financial filing with the SEC. Origen's management said they believe the company can raise funds to meet its existing debt obligations.
Upon completion of the transaction, St. Paul, Minn.-based Green Tree will see its servicing portfolio grow to over $22 billion.
The privately held company services the nation's largest portfolio of secured manufactured housing loans and installment contracts. The company also services residential mortgage loans and some other consumer loan products. Green Tree has service centers in Tempe, Ariz., and Rapid City, S.D. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/