Business Context and Reporting Period
This Form 8-K was filed by New Residential Investment Corp. on August 17, 2018. The filing reports the entry into a Material Definitive Agreement involving the company's subsidiary, New Penn Financial, LLC d/b/a Shellpoint Mortgage Servicing ("Shellpoint"), and Ocwen Loan Servicing, LLC ("OLS").
Key Financial Metrics
The filing text does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on the legal terms of a new subservicing agreement and amendments to existing contracts.
Material Changes and Agreements
- New Subservicing Agreement: Shellpoint entered into the "Shellpoint Subservicing Agreement" with OLS. Under this agreement, OLS will subservice mortgage loans related to Mortgage Servicing Rights (MSRs) transferred to Shellpoint.
- Fee Structure: Shellpoint will pay a subservicing fee to OLS as defined in the agreement.
- Term and Termination: The initial term expires on July 25, 2022. Shellpoint may terminate for convenience during the initial term (subject to a termination fee) or on a quarterly basis thereafter. OLS may cancel annually after the initial term.
- Amendments to Existing Agreements: New Residential Mortgage LLC ("NRM") and Ocwen amended the NRM Subservicing Agreement and the New RMSR Agreement to align with the Shellpoint agreement. These amendments include automatic termination clauses if related agreements are terminated for cause or convenience.
- Strategic Purpose: The agreements are intended to accelerate the transfer of OLS's remaining interests in approximately $110 billion of Subject MSRs to New Residential entities and facilitate the necessary third-party consents.
Guidance, Outlook, and Risks
The filing does not contain forward-looking financial guidance, management commentary on future earnings, or a discussion of general business risks. The primary contingency noted is the requirement to obtain third-party consents to finalize the transfer of MSR interests. Additionally, the agreements contain specific termination triggers based on the performance or termination of related contracts.
Investor Verification Checklist
- Verify the specific subservicing fee rates and termination fee amounts detailed in the full text of the Shellpoint Subservicing Agreement (Exhibit 10.44).
- Review the status of third-party consents required to transfer the remaining interests in the $110 billion Subject MSRs.
- Examine the full text of the amended NRM Subservicing Agreement and New RMSR Agreement to understand the specific conditions triggering automatic termination.
- Confirm the impact of these subservicing arrangements on the company's future operating expenses and net interest income.