Oniti Groupthe parent company of the top five reverse mortgage lenders and servicers Liberty Reverse Mortgagewill acquire reverse mortgage assets Mortgage Asset Management LLC (MAM), a subsidiary of investment funds managed by Waterfall Asset Management.
The deal, initially announced by Onity during its second-quarter earnings call, signals Waterfall’s commitment to the reverse mortgage space. The protocol’s core assets are already serviced by: PHH Mortgageitself a subsidiary of Onity and the parent company of Liberty.
Onity announced in its second-quarter report that the assets have “an estimated unpaid principal balance of approximately $3 billion.” “In consideration of the acquisition, the company intends to issue new, non-convertible cumulative preferred stock with a par value of $51.7 million to Waterfall.”
“This strategic partnership combines our capital and expertise with Onity’s operational capabilities, allowing us to pursue exceptional investment opportunities. We look forward to expanding this collaboration,” Waterfall partner Leo Wong said in a statement , to leverage our complementary strengths. “
Wong added that from Waterfall’s perspective, the deal signals the company’s desire to expand its presence in the reverse mortgage industry. Onity — formerly known as irving financial corp. — Worked with Waterfall for many years.
“We are very excited about today’s announcement and what it means for our ability to continue to grow our Home Equity Conversion Mortgage (HECM) activity,” Wong added. “We believe HECM is a valuable tool in today’s environment for homeowners, many of whom have accumulated significant equity but also benefited from low mortgage rates and therefore want to acquire that equity without selling their home. ,and [we] It is a pleasure to support the growth of this dynamic industry in real estate finance.
house lineThe Reverse Mortgage Daily (RMD) contacted Onity for comment. A company spokesman referred inquiry back to comments made by Onity leadership in its second-quarter 2024 earnings information, in which CEO Glen Messina expressed satisfaction with the deal. There was no immediate response to inquiries about the waterfall.
“We expect this transaction to be immediately accretive to earnings and cash flow upon closing, while strengthening our position in inverse services as a hedge forward [mortgage servicing rights (MSRs)]provide incremental asset management opportunities and improve our capital structure,” Onity CEO Glen Messina previously said in a statement.
Messina went on to call MAM a “valuable service customer.” Onity Chief Financial Officer Sean O’Neil provided more details during the earnings call.
“This transaction strengthens and expands the already healthy relationship between our two companies,” O’Neill said last week. “Waterfall affiliate MAM has been a client of our services for some time, so we know these assets very well from a performance perspective.
“This transaction is also accompanied by financing provided by the seller and is accretive to earnings per share and cash. Our intention is that, upon completion of the transaction, we will use the proceeds to further reduce the company’s debt, which is expected to be $40 million.
Onity forays into reverse mortgage servicing in 2021 by acquiring lender-turned-servicer HECM for $12.4 million Reverse Mortgage Solutions After a rollercoaster of ownership changes and legal battles that ended in 2017 as a reverse mortgage lender, RMS was acquired by its owner MAM.
Services have been a focus in Onity/Ocwen’s earnings reports, including reverse mortgage servicing as a business segment that contributes to the company’s profitability and portfolio diversification.
In a previous interview with RMD, Waterfall’s Wong explained that the development of the new reverse mortgage-backed securities program Ginnie Mae Helps strengthen the company’s overall confidence in the future of the reverse mortgage industry.
“I think from our perspective, this is an event that we, like most industry participants, are very excited to hear,” Huang said in July. “I think the industry as a whole has responded quite positively to this. Ginnie Mae has shown a real commitment to reverse mortgage products through its HECM-backed securities (HMBS) program.
