Barclays Bank has agreed to sell its US mortgage servicing business HomEq Servicing to Ocwen Loan Servicing, a subsidiary of Florida-based Ocwen Financial, for a consideration of approximately $1.3bn, payable in cash on completion.

As part of the transaction, Barclays has agreed to provide Ocwen with approximately $1bn in secured financing and may assist Ocwen in raising additional third party financing.

HomEq services mortgages with an unpaid principal balance of approximately $28bn as at 31 March 2010. HomEq Servicing’s principal assets subject to the transaction are the mortgage servicing rights and associated servicer advances, as well as the servicing platform based in Sacramento, California and Raleigh, North Carolina.

Tom Hamilton, head of securitized products trading at Barclays Capital, said: “Barclays Capital is committed to providing first-class products and capabilities to our clients worldwide. We look forward to continuing to serve our issuer and investor clients from our position as a leading underwriter and market maker of securitised products.”

However, the completion of the transaction is subject to customary conditions, and is expected to occur in Q3 2010.