New Residential To Buy Mortgage Servicing Rights; Sees Q4, FY16 EPS Above Market

(RTTNews) - New Residential Investment Corp. (NRZ) announced Monday an agreement to acquire approximately $97 billion unpaid principal balance or UPB of mortgage servicing rights or MSRs.

On January 27, New Residential, through its wholly-owned subsidiary New Residential Mortgage LLC, entered into an agreement to purchase approximately $97 billion UPB of seasoned Agency MSRs and related servicer advances from CitiMortgage, Inc. for a purchase price of approximately $950 million and $32 million, respectively.

The acquisition of the MSRs is expected to close in the first quarter of 2017, subject to government-sponsored enterprise and regulatory approvals and other customary closing conditions.

Citi will continue to subservice the portfolio on behalf of NRM, pending receipt of GSE and regulatory approvals to transfer servicing to Nationstar Mortgage LLC.

Further, the company announced estimated preliminary results for the fourth quarter .

For the fourth quarter of 2016, the company expects net income per share in the range of $0.87 to $0.91 and core earnings in the range of $0.59 to $0.63 per share. For the full year 2016, the company expects net income per share in the range of $2.09 to $2.13 per share and core earnings in the range of $2.12 to $2.16 per share.

On average, 10 analysts polled by Thomson Reuters expect earnings of $0.51 per share for the quarter and $2.04 per share for the year. Analysts' estimates typically exclude special items.

In addition, New Residential's board of directors declared a quarterly dividend of $0.48 per share for the first quarter of 2017, up from $0.46 last year.