Mr. Cooper sells off reverse mortgage servicing unit in major deal

Although the sale will reduce Mr. Cooper’s servicing portfolio by $16 billion and decrease its balance sheet by roughly $5 billion in HECM and other assets, the company said that it doesn’t expect a significant impact on its second-quarter results.

“We are incredibly thankful to the Champion Mortgage team for their steadfast commitment to our business, and we will work to make the transition for them and our customers as smooth as possible,” said Jay Bray, chairman and CEO of Mr. Cooper Group. “From a strategic standpoint, this is a major transaction – we can now completely focus on our core origination and servicing segments. It also improves profitability, strengthens our capital ratios, and positions us to accelerate growth.”

“Measured from inception, Champion Mortgage has been a profitable operation for Mr. Cooper, but it is not a material driver of our business,” said Chris Marshall, president and chief financial officer of Mr. Cooper. “This transaction strengthens our business model, simplifies our financial statements, and allows us to reallocate liquidity into our core operations. These benefits will contribute to even stronger momentum for Mr. Cooper.”

In addition to the agreement with MAM, Mr. Cooper announced that it has closed the sale of its title insurance business, Title365, to Blend Labs for $500 million. Mr. Cooper received cash proceeds of $450 million and reported an after-tax gain of approximately $350 million.

Read more: Mr. Cooper to sell title insurance business to Blend