Ocwen to Buy Homeward Residential for $750 Million

Loan servicing company Ocwen Financial Corp. said Wednesday that it is buying Homeward Residential Holdings Inc. in a $750 million deal.

The acquisition will help expand Ocwen's servicing business and its capacity for future growth.

Ocwen is buying the loan servicing company from private equity firm WL Ross & Co. LLC for $588 million in cash and $162 in Ocwen convertible preferred stock. The deal includes Homeward's residential mortgage loan servicing and origination operating subsidiaries.

Homeward services about 422,000 mortgage loans with an aggregate unpaid principal balance exceeding $77 billion.

Ocwen expects the deal will add to earnings per share immediately. The acquisition is expected to close by the end of the year.

Shares of Ocwen soared 20 percent to close at $34.88 on the news. The Atlanta-based company has been on a strong bull streak with its stock price nearly tripling over the past 52 weeks.