New Residential's $1.2 Billion Move: Who Bought Out Ditech and What It Means

New Residential Investment Corp. (NYSE: NRZ) has officially closed its acquisition of Ditech’s core mortgage operations in a transaction valued at approximately $1.2 billion. This strategic purchase marks a significant consolidation play in the mortgage servicing sector.

The Deal Breakdown

So who bought out Ditech? New Residential Investment Corp., a major player in mortgage capital and services, stepped in to acquire a collection of Ditech’s forward mortgage servicing businesses. The company financed the transaction using existing financing facilities combined with available cash reserves.

The acquisition encompasses Ditech’s Fannie Mae, Ginnie Mae, and non-agency mortgage servicing rights (MSRs), which carried an aggregate unpaid principal balance of roughly $62 billion as of August 31, 2019. Beyond the MSR portfolio, New Residential also acquired the associated servicer advance receivables and other assets critical to mortgage origination and servicing operations.

Workforce and Operational Integration

The transaction included an operational component that shouldn’t be overlooked: New Residential assumed certain Ditech office locations and welcomed approximately 1,100 Ditech employees into its workforce. This integration was designed to handle the anticipated volume increase across origination and servicing divisions.

Michael Nierenberg, Chairman and CEO of New Residential, emphasized the preparation that went into the deal: “We have spent the last number of months preparing for the close of this acquisition and structuring a robust transition plan. We are excited to execute on our plan and see tremendous potential for creating value across our business.”

Strategic Context

New Residential entered 2019 with approximately $37 billion in assets and a diversified portfolio spanning mortgage servicing assets, non-agency securities, residential loans, and opportunistic investments. The company had already strengthened its operational capabilities through its 2018 acquisition of Shellpoint Partners LLC, which brought origination and third-party servicing platforms into the fold.

This Ditech acquisition represents New Residential’s continued expansion of its mortgage servicing footprint, building on its track record since inception in 2013. The company has consistently delivered risk-adjusted returns and distributed approximately $3 billion in dividends to shareholders over that period.

Why This Matters

The $62 billion in servicing rights being transferred represents meaningful scale in the residential mortgage market. By consolidating these operations under New Residential’s management—backed by Fortress Investment Group LLC’s investment expertise—the company aims to unlock operational efficiencies and generate incremental value across its platform.

The integration of 1,100 new employees signals New Residential’s confidence in the MSR business and its ability to retain and scale Ditech’s servicing capabilities within its existing infrastructure.