Walter Investment Management Corp. (AMEX:WAC) and Ocwen Loan Servicing, LLC won an auction to acquire mortgage servicing and origination platform assets from Residential Capital, LLC, EPRE LLC, GMACM Borrower LLC and others for $3 billion on October 24, 2012. An asset purchase agreement was signed on November 2, 2012. Walter and Ocwen presented a winning bid of $3 billion, with Walter's portion of the bid equal to approximately $540 million. Ocwen has received a commitment letter from Barclays Bank PLC to provide a senior secured term loan facility of up to $1.5 billion and servicing advance facility to finance up $1.2 billion. Under the joint bidding arrangement, Walter Investment Management will acquire the Fannie Mae mortgage servicing rights (MSR) portion of Residential Capital's property, representing approximately $50.4 billion in unpaid principal balance, as well as the origination and capital markets platform. The sale approval hearing before the bankruptcy court is set for November 19, 2012.

The transaction is subject to definitive documentation, third party approvals and bankruptcy court approval, customary closing conditions for a transaction of this nature, including the approval of Freddie Mac, Fannie Mae and various government agencies. Residential Capital Board of Directors has given preliminary approval to the bid by Ocwen and Walter Investment. Walter expects the purchase to close during the first quarter of 2013. The transaction requires approval under the HSR Act. As of November 21, 2012, the transaction was approved by the U.S. Bankruptcy Court for the Southern District of New York. As on January 31, 2013, Walter Investment Management Corp. (AMEX:WAC) completed the acquisition of Fannie Mae mortgage servicing rights (MSR) portion of Residential Capital's property from Residential Capital. The court's approval for the sale of assets to Ocwen Loan Servicing is still pending.

Barclays Capital acted as financial advisor for Ocwen. Larren M. Nashelsky, Gary S. Lee and Lorenzo Marinuzzi of Morrison & Foerster LLP acted as legal advisor to Residential Capital. Centerview Partners LLC and FTI Consulting Inc. acted as financial advisor for Residential Capital. Morrison Cohen LLP acted as legal advisor for Residential Capital's independent directors. Jon D. Van Gorp, John F. Lawlor, William R. Kucera, Haukur Gudmundsson and Darius J. Horton of Mayer Brown LLP acted as the legal advisors for Ocwen Loan Servicing. Barclays Capital acted as financial advisor for Residential Capital. Richard M. Cieri, Ray C. Schrock and Stephen E. Hessler of Kirkland & Ellis LLP acted as legal advisors to Residential Capital. Kenneth H. Eckstein, Philip Bentley, Douglas H. Mannal and Joshua K. Brody of Kramer Levin Naftalis & Frankel LLP are counsel to the official committee of unsecured creditors. Clifford Chance LLP acted as legal advisors to Walter Investment and Ocwen. Lazard Ltd. acted as financial advisor for US Dept. of the Treasury, a majority owner of Ally Financial, ultimate parent of Residential Capital, LLC.

Walter Investment Management Corp. (AMEX:WAC) and Ocwen Loan Servicing, LLC completed the acquisition of mortgage servicing and origination platform assets from Residential Capital, LLC, EPRE LLC, GMACM Borrower LLC and others on February 15, 2013.