Barclays Agrees to Sell HomEq to Ocwen Unit

Barclays Bank PLC has agreed to sell HomEq, a specialty servicer, to a division of Ocwen Financial for roughly $1.3 billion. Under terms of the agreement, Ocwen Loan Servicing LLC would pay for the U.S. mortgage servicing business in cash at the completion of the deal, with the amount subject to an "adjustment mechanism." The mechanism is based on the unpaid principal balance of HomEq's servicing portfolio and the value of certain other assets at the completion of the transaction, according to Barclays. HomEq's servicing portfolio had a UPB of $28 billion at the end of March. The division is based in North Highlands, Calif., and was once owned by Wachovia Corp., which sold it to Barclays four years ago for $470 million, a year before the subprime meltdown began. It also has connections to the Money Store, a well-known subprime lender. The British-based Barclays said it expects the transaction to close in the third quarter, subject to customary conditions that include competition clearance and regulatory approval. The publicly traded Ocwen Financial is based in West Palm Beach, Fla.