Construction of a new facility for PHH Mortgage Corp. in Amherst is moving forward, amid speculation that its parent company is looking into selling its subsidiaries.
PHH Mortgage will lease a facility that Zaepfel Development is building in College Park on Wehrle Drive. The project is valued at $34 million, including the equipment that will be installed.
Parent company PHH Corp. was in the spotlight this week following a Reuters report citing unidentified sources who said the company was exploring splitting up its mortgage and auto fleet leasing businesses and selling each of the units. PHH has declined to comment.
Ronald George, chief financial officer of Zaepfel Development, said he was aware of the news report. “Our contacts say that hasn’t changed their business plan” in Amherst.
The new building is set to open in April 2014, George said. The Wehrle Drive facility will consist of 97,000 square feet, with capacity for 800 employees. In the interim, PHH is leasing space at Northpointe Commerce Park.
Plans for PHH’s new facility were set in motion in May 2012 when HSBC Mortgage Corp. agreed to transfer its retail mortgage processing and servicing business to PHH. HSBC has retained ownership of the loans; HSBC is paying fees to PHH for providing services.
HSBC had handled the work out of a facility at Walden Avenue and Dick Road in Depew. But HSBC has other operations there, and the bank is moving some of its employees to the Depew site as it vacates the downtown One HSBC Center tower. PHH opted to move the work it acquired to a building of its own, and settled on a new site in Amherst.
It’s expected that the new Amherst facility will preserve 400 jobs related to the HSBC work, and possibly allow for creation of 400 additional jobs.
The Reuters report, citing unidentified sources, said if all of PHH were sold, the total value could be $1.5 billion. It described PHH as the eighth-largest mortgage servicer and seventh-largest mortgage originator as of the end of the second quarter 2013, based on data from Inside Mortgage Finance.