Rithm Capital Corp (RITM)

[Enterprising Investor]

New Residential and Walter Investment Announce Mortgage Servicing Rights Purchase Agreement and Subservicing Agreement (8/09/16)

NEW YORK & TAMPA, Fla.--(BUSINESS WIRE)--New Residential Investment Corp. (NYSE:NRZ, “New Residential”) and Walter Investment Management Corp. (NYSE:WAC, “Walter”) today announced an agreement (the “Purchase Agreement”) for the purchase and sale of approximately $35 billion UPB of seasoned conventional mortgage servicing rights (“MSRs”) for a purchase price of approximately $231 million.

In addition, New Residential, Walter and Walter Capital Opportunity, LP have agreed in principle for the purchase and sale of substantially all of the assets of Walter Capital Opportunity, LP and its subsidiaries (“WCO”), along with certain related assets owned by Walter, which, collectively, represent approximately $37 billion UPB of MSRs for a purchase price of approximately $283 million.

Assuming completion of both transactions with Walter and WCO, aggregate purchase price is expected to be approximately $514 million.

New Residential, through its wholly-owned subsidiary, New Residential Mortgage LLC (“NRM”), has also entered into a forward flow arrangement with Walter to acquire MSRs of newly-originated residential mortgage loans, subject to the parties’ mutual agreement on pricing. This agreement is intended to have an initial term of three years, subject to an extension at the option of the parties and earlier termination date in accordance with its terms.

Concurrently with the Purchase Agreement, NRM entered into a subservicing agreement with Ditech Financial LLC (“Ditech”), a wholly owned subsidiary of Walter, pursuant to which Ditech will subservice the mortgage loans underlying the MSRs acquired by NRM under the Purchase Agreement.

“We are excited to announce this transaction with Walter and look forward to a successful long-term strategic partnership,” said Michael Nierenberg, Chairman and Chief Executive Officer of New Residential. “This transaction further demonstrates New Residential’s role as a leading capital provider to the residential mortgage servicing market. Our new relationship with Walter allows us to add another highly rated mortgage servicer as a partner while creating meaningful value and returns for our shareholders.”

George M. Awad, Executive Chairman of the Board and interim Chief Executive Officer and President of Walter commented, “We are extremely pleased to have entered into this strategic relationship with New Residential. We anticipate this will be a long-term and mutually beneficial relationship, allowing both entities to achieve their shared objectives of growth and improved earnings with lower risk, which should ultimately drive significant value for shareholders.”

The transactions are expected to close in the third or fourth quarter of 2016 and are subject to (i) GSE and other regulatory approvals, (ii) for the WCO assets, negotiation and execution of definitive documentation and (iii) certain customary closing conditions.

ABOUT NEW RESIDENTIAL INVESTMENT CORP.

New Residential focuses on opportunistically investing in, and actively managing, investments related to residential real estate. New Residential primarily targets investments in mortgage servicing related assets and other related opportunistic investments. New Residential is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. New Residential is managed by an affiliate of Fortress Investment Group LLC (NYSE: FIG), a global investment management firm. For more information about New Residential, please visit New Residential's website at www.newresi.com.

ABOUT WALTER INVESTMENT MANAGEMENT CORP.

Walter is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. Based in Tampa, Fla., Walter has approximately 5,600 employees and services a diverse loan portfolio. For more information about Walter, please visit Walter's website at www.walterinvestment.com.

http://www.businesswire.com/news/home/20160809005582/en/Residential-Walter-Investment-Announce-Mortgage-Servicing-Rights