Onity Group Announces Strategic Relationship with Finance of America Reverse

Core Viewpoint - PHH Mortgage Corporation has entered into a strategic partnership with Finance of America Reverse to reposition its role in the reverse mortgage market, transitioning to a subservicer and asset manager while selling reverse mortgage servicing rights for estimated net proceeds of $100 to $110 million [1][5]. Group 1: Transaction Details - PHH will sell reverse mortgage servicing rights (MSRs) for approximately 40,000 Ginnie Mae home equity conversion mortgage (HECM) loans, with an unpaid principal balance of $9.6 billion as of September 30, 2025 [3]. - The transaction includes a three-year subservicing agreement where PHH will act as the subservicer for the sold reverse MSRs [3]. - FAR will acquire PHH's pipeline of reverse mortgage loans and is expected to take on some of PHH's US-based reverse originations employees [4]. Group 2: Financial Implications - The estimated net proceeds from the transaction are projected to be between $100 million and $110 million, subject to adjustments based on asset balances at closing [5]. - The transaction is anticipated to close in the first quarter of 2026, pending regulatory approval and customary closing conditions [5]. - The company plans to use the net proceeds to support growth, reduce debt, and explore a share repurchase program, with expectations that the transaction will be accretive to earnings over the term of the subservicing agreement [6]. Group 3: Strategic Benefits - The partnership with FAR establishes a significant subservicing relationship, simplifying the company's balance sheet by eliminating reverse HECM assets and HMBS liabilities [8]. - This strategic move allows the company to focus on markets and products with greater growth potential, including forward originations and the recently launched FlexIQ product suite [8]. - The transaction is expected to strengthen financial metrics such as liquidity and capital ratio [8].