PHH Corp. is considering selling its mortgage banking business, a move that is apparently being driven by some of the company's investors.
"Our decision to explore a separation or sale of our businesses reflects our determination to maximize shareholder value. We appreciate the constructive input we have received from Orange Capital and our other shareholders in this regard," Glen A. Messina, president and CEO of PHH Corporation, said in a press release Tuesday. Orange Capital, an activist investor, acquired about 5% of PHH in September and raised the stake to 6% in January.
The company has retained J.P. Morgan Securities LLC, Centerview Partners LLC and Kirkland & Ellis LLP to help explore separation or sale of the mortgage business, the automobile fleet business (PHH Arval) or both.
PHH originates mortgages both on behalf of itself and as a private label outsourcer for financial institutions. It finished last year's third quarter as the nation's seventh largest mortgage originator with volume of nearly $15 billion and sixth in the retail channel, where it originated $13 billion, according to MortgageStats.com. Its $228 billion portfolio ranked eighth as of Sept. 30.
In November 2011, PHH went through a major cash crisis, pulling the plug on a debt offering and then reviving it in a different form. Because of the market's negative perception of the company's actions, then-president and CEO Jerome Selitto was forced to resign.
Last October, rumors that PHH was for sale entered the market as well. Now the company is making it official.