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New York, NY (Profitable.com) New Residential Investment Corp. (“New Residential” or the “Company”) announced today that it has co-invested with Nationstar Mortgage LLC (“Nationstar”) in its recent acquisition of mortgage servicing rights (“MSRs”). The portfolio has an unpaid principal balance (“UPB”) of approximately $23 billion and is composed of residential mortgage loans in government sponsored enterprise (“GSE”) pools.
New Residential invested approximately $38 million to acquire the right to receive one-third of the monthly cash flow generated by the MSRs, net of a basic fee paid to Nationstar. Nationstar is the servicer of the loans and will perform all of the day-to-day servicing functions. New Residential will not own the servicing rights and therefore will not have any servicing duties, advance obligations or liabilities associated with the portfolio. A fund managed by Fortress Investment Group has also acquired a one-third interest in the MSR cash flows.
Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting MSRs will be included in the portfolio, subject to certain limitations. This should serve to significantly reduce the impact of prepayments on New Residential’s investment.
This transaction is expected to bring New Residential’s total initial investment in MSR cash flows to approximately $645 million and the UPB of the underlying loans to over $310 billion.
About New Residential
New Residential (NYSE: NRZ) focuses on opportunistically investing in, and actively managing, investments related to residential real estate. New Residential is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.
Forward Looking Statements
Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. New Residential can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in the Company’s Registration Statement on Form 10, which is available on the Company’s website (www.newresi.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. New Residential expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.