Newcastle Investment Corp. (NYSE: NCT) announced today that it has
completed the final closing of its co-investment with Nationstar
Mortgage LLC related to their acquisition of mortgage servicing rights
(“MSRs”) from Aurora Bank FSB, a subsidiary of Lehman Brothers Bancorp
Inc. The final closing relates to MSRs on non-conforming loans in
private label securitizations with an unpaid principal balance (“UPB”)
of approximately $47.6 billion. Newcastle acquired a 65% interest in the
monthly cash flows, net of a base fee paid to Nationstar, generated by
As previously announced, on June 12, 2012, Newcastle co-invested with
Nationstar in their acquisition from Aurora of MSRs on two GSE loan
pools with a total UPB of approximately $16.1 billion.
In total, Newcastle invested $176.5 million to acquire a 65% interest in
the net MSR cash flows on the aggregate portfolio with an approximately
$63.7 billion UPB. Nationstar acquired the remaining 35% interest, and
it will be the servicer of the loans.
Newcastle will not have any servicing duties, advance obligations or
liabilities associated with the portfolio. Under the terms of this
investment, to the extent that any loans in the portfolio are refinanced
by Nationstar, the resulting MSRs will be included in the portfolio,
subject to certain limitations. This should serve to significantly
reduce the impact of prepayments on Newcastle’s investment.
Newcastle plans to post a presentation on its website outlining the
entire Aurora investment in the coming days.
The Company invests in real estate debt and other real estate related
assets, including net MSR cash flows. The Company is organized and
conducts its operations to qualify as a real estate investment trust
("REIT") for federal income tax purposes. The Company is managed by an
affiliate of Fortress Investment Group LLC, a global investment
management firm. For more information regarding Newcastle or to be added
to its e-mail distribution list, please visit http://www.newcastleinv.com.
Certain statements in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including, but not limited to, expectations
regarding the impact of prepayments on Newcastle’s investment. These
statements are based on management's current expectations and beliefs
and are subject to a number of trends and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements, many of which are beyond Newcastle's
control. Accordingly, you should not place undue reliance on any
forward-looking statements contained in this press release. For a
discussion of some of the risks and important factors that could cause
actual results to differ from forward-looking statements, see the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operation" in the
Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
which are available on the Company's website (http://www.newcastleinv.com).
Forward-looking statements speak only as of the date of this press
release. Newcastle expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations
with regard thereto or change in events, conditions or circumstances on
which any statement is based.