Home Loan Servicing Solutions, which purchases some mortgage business from sister company Ocwen Financial, is bringing a mortgage servicer advance receivable to the market.
The asset-backed securitization will be collateralized by Ocwen($43.00 0.51%) serviced mortgages, comprised of formerHomeward Residential Holdings paper.
The deals are being marketed as the $425 million Advance Receivables-Backed Notes Series 2013-T2 and $425 million Advance Receivables-Backed Notes Series 2013-T3.
In December 2012, Ocwen purchased Homeward Residential Holdings $2.267 billion servicing portfolio. $703.2 million of that contributes to the existing collateral in the facility.
The securitization of mortgage servicing advances are becoming more and more common.
Earlier this year North-Texas based servicing giant Nationstar Mortgage Holdings ($44.83 1.02%) priced a securitization from its special purpose vehicle Nationstar Agency Advance Funding Trust for an estimated $900 million in mortgage servicer advance receivable-backed notes.
Credit enhancement in the HLSS deal is primarily via overcollateralization with a subsequent reserve fund to cover any investor shortfall.
S&P remarked on the strength of the deal, adding Ocwen’s commitment to continue to make advances on delinquent loans until the servicer deems them nonrecoverable, as a clear positive. And it’s listed as such in the Pooling and Servicing Agreement.
Tranches are mainly and preliminarily rated investment-grade.
However, there remains some unknowns related to foreclosure litigation, the pre-sale states. And HLSS’ ability to advance payment to investors is based on the ability of Ocwen to keep the payments coming.
S&P ranks Ocwen highly as a mortgage servicer, prompting it to downplay this risk in its analysis.
A federal judge on Monday made the rare move to stop the foreclosure auction of an Aurora woman’s house in a case that squarely takes on the constitutionality of Colorado’s foreclosure laws.
U.S. District Judge William Martinez issued a preliminary injunction against the sale of Lisa Kay Brumfiel’s four-bedroom home, scheduled for Wednesday in Arapahoe County, until the judge can decide whether parts of state law are unfair to homeowners facing the loss of their house.
At issue is a provision in state law that allows lawyers to assert that their client, typically a bank, has the right to foreclose on a property even though they might not have the original mortgage paperwork to prove it.
What makes the case compelling isn’t just that a federal judge was persuaded to step into an issue involving state law — extremely difficult to do — but the plaintiff in the case is a part-time saleswoman who has taken on the battle without a lawyer.
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