The job cuts are part of a deal to sell existing and future mortgage servicing rights to Nationstar Mortgage Holdings Inc., a servicer based in Dallas, Texas. According to a statement, Seneca Mortgage Servicing LLC will unload approximately $50 billion in mortgage servicing rights to Nationstar Mortgage Holdings Inc. (the latter will be a subservicer). This deal is subject to regulatory approval and follows a previously announced private-label subservicing deal worth $55 billion.
Mortgage servicing rights (MSR) refers to contractual agreements in which the right to service existing mortgages is sold by the original lenders to other parties that specialize in the various functions of servicing mortgages. Common rights included in the agreement are the right to set aside taxes and insurance premiums in escrow, collect mortgage payments monthly, and forward interest and principal to the original lender. In turn, the parties holding the mortgage servicing rights are paid set fees.
Seneca Mortgage Servicing LLC entered the mortgage servicing rights arena in 2014. The company is a subsidiary of Seneca Mortgage Investments L.P. and employs 267 professionals.
Seneca Mortgage Servicing LLC – a residential mortgage servicer headquartered in the Buffalo suburb of Elma, NY – filed notice late last week with the New York State Department of Labor, stating that it will eliminate 43 positions at the end of October 2016.