Then:
While I've been holding it since June, today's announcement was one of the catalysts I was looking for - the acquisition of more cheap unpaid principal balances (UPBs). This is an industry term - basically, whoever services these mortgages gets 0.25-0.50% (25-50 basis points).
Homeward Residential Holdings, Inc had $77B in UPBs, and Ocwen paid $588 million in cash and $162 million in convertible preferred stock.
Therefore, Ocwen gets roughly $77B * 0.25% to 0.50% or 192.5$mm to 385$mm. The total purchase price was ~750$mm or 2 to 4 times the annual revenue rate! This is not even accounting for the origination business!
The best part of all this flows to ASPS, as Ocwen's technology provider.
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