Onity Group announced Tuesday that it was able to get an essential approval for a reverse mortgage transaction with Finance of America by reducing the amount of servicing rights it’s agreeing to sell.
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The plan the company announced in
Although some other closing conditions are still pending, Ginnie’s approval moves Onity one step closer to a deal that will allow it to exit reverse mortgage originations while staying involved in some other aspects of the business.
“This strategic transaction will establish a significant subservicing relationship with FAR,” said Glen Messina, chairman, president and CEO of Onity Group, in a statement that references Finance of America’s reverse mortgage unit.
Share repurchase prospects
The stock buyback authorized is for up to $20 million in shares through June of next year through open-market repurchases. The company makes no promises that it will move forward with it.
The announcements had boosted the company’s stock price at deadline Tuesday afternoon to over $38 per share. It was up nearly 13% on the trading day at that time.
Nonbank mortgage companies active in origination have been looking harder at strategic deployment of capital given the current and historic interest rate cycles challenging the business. Onity remains active in traditional mortgage originations.
Other recent capital strategies that publicly-traded nonbank mortgage companies have authorized have included
