Houlihan Lokey Advises Waterfall Asset Management

Houlihan Lokey is pleased to announce that substantially all of the assets of Mortgage Assets Management, LLC (MAM), a mortgage servicer and subsidiary of investment funds managed by Waterfall Asset Management, LLC (WAM), have been acquired by Onity Group (NYSE:ONIT) (Onity) and its subsidiary PHH Mortgage Corporation (PHH), a nonbank mortgage servicer and originator. The transaction closed in November 2024.

The transaction showcases WAM’s commitment to various reverse mortgage opportunities through partnerships. This strategic partnership combines WAM’s capital and expertise with Onity’s operational capabilities, enabling WAM to continue pursuing attractive investment opportunities.

Onity expects the transaction to be accretive to earnings and cash flows, strengthen its position in reverse servicing as a hedge to forward mortgage servicing rights (MSRs), provide incremental asset management opportunities, and improve its capital structure. Onity further expects that the cash acquired in the acquisition, together with proceeds from future debt financing secured by the mortgage assets acquired from MAM, will result in total cash proceeds to Onity of approximately $46 million.

The transaction included home equity conversion mortgage (HECM) reverse mortgages and MSRs with an estimated $3 billion in unpaid principal balance as well as roughly $20 million in cash and other related assets. The mortgage assets acquired were previously subserviced by PHH.

As consideration, Onity issued shares of a new series of nonconvertible, perpetual preferred stock to WAM.

Houlihan Lokey served as the exclusive financial advisor to WAM. This deal strengthens Houlihan Lokey’s position as one of the most active financial advisors to the mortgage servicing and reverse mortgage subsectors.

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