NEW YORK CITY—New Residential Investment Corp. (NRZ) said Wednesday it had signed agreements to acquire specialty finance company Shellpoint Partners, a $190-million acquisition that the mortgage REIT says is highly complementary to its existing capabilities, including mortgage servicing rights. An approved Fannie Mae and Freddie Mac seller and servicer, Shellpoint will bring a $50-billion servicing portfolio and annual origination volume of about $6.6 billion to the mix, the latter through its New Penn Financial platform.
“Shellpoint's origination and servicing platforms provide New Residential with recapture capabilities that can help enhance returns on our existing MSR portfolio and create new complementary revenue channels,” says NRZ CEO Michael Nierenberg. “In addition, as a rated servicer, we believe Shellpoint will provide added servicing capacity to further diversify our servicing relationships and help accelerate transfer timelines for our MSR purchases.”
On a conference call Wednesday, Nierenberg told investors that the acquisition notwithstanding, Shellpoint won't be getting all of NRZ's mortgage subservicing business. Instead, Shellpoint will work alongside NRZ's existing servicing relationships, which also include Nationstar and Altisource.
The acquisition of Shellpoint will occur in two stages during the first half of 2018. In stage one, NRZ will settle approximately $8 billion in unpaid balance of Fannie and Freddie MSRs from Shellpoint. Once that's completed, NRZ will close on 100% of the outstanding equity interests in Shellpoint.
In connection with the acquisition agreements, NRZ is receiving legal advice from Skadden, Arps, Slate, Meagher & Flom LLP; Bradley Arant Boult Cummings LLP; and Hunton & Williams LLP. Advising Shellpoint on the transaction are Houlihan Lokey Capital as financial advisor and Sheppard, Mullin, Richter & Hampton LLP, Dentons US LLP and Buckley Sandler LLP as legal advisors.
“Shellpoint's origination and servicing platforms provide New Residential with recapture capabilities that can help enhance returns on our existing MSR portfolio and create new complementary revenue channels,” says NRZ CEO Michael Nierenberg. “In addition, as a rated servicer, we believe Shellpoint will provide added servicing capacity to further diversify our servicing relationships and help accelerate transfer timelines for our MSR purchases.”
On a conference call Wednesday, Nierenberg told investors that the acquisition notwithstanding, Shellpoint won't be getting all of NRZ's mortgage subservicing business. Instead, Shellpoint will work alongside NRZ's existing servicing relationships, which also include Nationstar and Altisource.
The acquisition of Shellpoint will occur in two stages during the first half of 2018. In stage one, NRZ will settle approximately $8 billion in unpaid balance of Fannie and Freddie MSRs from Shellpoint. Once that's completed, NRZ will close on 100% of the outstanding equity interests in Shellpoint.
In connection with the acquisition agreements, NRZ is receiving legal advice from
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
