Newcastle Investment Corp. (NYSE: NCT) announced today that the Company
has made its first investment in Excess Mortgage Servicing Rights
("Excess MSRs"). The Company invested $44 million to acquire a 65%
interest in the Excess MSR of a $9.9 billion residential mortgage
portfolio. Nationstar Mortgage LLC will be the servicer of the loans and
will invest alongside Newcastle by acquiring the remaining 35% interest
of the Excess MSR. Nationstar currently services over $100 billion in
loans and is an active originator of residential mortgage loans.
Under the terms of this investment, to the extent that any loans in this
portfolio are refinanced by Nationstar, the resulting mortgage servicing
right will be included in the portfolio, subject to certain limitations.
This should serve to significantly reduce the impact of prepayments on
our investment. Newcastle will not have any servicing duties, advance
obligations or liabilities associated with the portfolio.
Kenneth Riis, the Company's CEO commented, "I am very pleased to
announce our first investment in Excess Mortgage Servicing Rights. This
is a watershed investment for us in this sector. We expect this
investment will generate approximately a 20% unleveraged return and
total cash flows of over 2 times our investment. I am excited to be
investing alongside Nationstar, a premier mortgage servicer and
originator. Residential mortgage servicing is a large market and we
currently see a strong pipeline of similar investments at very
attractive returns." In connection with the transaction, the Company has
posted a presentation on its website in the Investor Relations section
Newcastle Investment Corp. invests in real estate debt and other real
estate related assets. Newcastle is organized and conducts its
operations to qualify as a real estate investment trust (REIT) for
federal income tax purposes. Newcastle is managed by an affiliate of
Fortress Investment Group LLC, a global investment management firm. For
more information regarding Newcastle Investment Corp.