Lehman Brothers Holdings Inc. (LEHMQ) said Friday it has sold its Aurora Bank FSB subsidiary, a move that should help funnel some $1.5 billion into the pockets of Lehman's creditors. Home mortgage servicer Nationstar Mortgage Holdings Inc. (NSM) said Friday it acquired approximately $63.7 billion in residential mortgage servicing rights from Aurora, while Lehman said New York Community Bank took over Aurora's customer deposits. Ocwen Financial Corp. (OCN) previously purchased Aurora's commercial servicing assets. Terms of the sales, which closed Thursday and were announced Friday, weren't disclosed. However, the sales, combined with an earlier sale of Lehman's Woodlands Commercial Bank subsidiary, are expected to raise about $1.5 billion for Lehman's bankruptcy estate, according to Doug Lambert, who manages Lehman's commercial- and thrift-banking operations. "Whatever proceeds are available will ultimately be distributed to the estate for the beneficial interest of the creditors of Lehman Brothers Holding," Mr. Lambert said Thursday afternoon in an interview. That estate is the source of recovery for creditors of the failed investment bank, which sought Chapter 11 protection in September 2008 and emerged this March with a $65 billion creditor-payment plan. Proceeds from the Woodlands sale should be available for distribution to creditors this year, Mr. Lambert said, while Aurora's continued wind-down could delay distribution of its sale proceeds for up to several years. Mr. Lambert, a managing director with advisory firm Alvarez & Marsal, said the transactions are actually worth some $3.5 billion to Lehman because they saved it from potentially significant liabilities if the banks had instead been taken over and wound down by banking regulators. In fact, it is unusual for banks of Aurora's and Woodlands's size--together, the banks boasted about $13.5 billion worth of assets at the time of Lehman's bankruptcy filing--to be wound down independently and as still-functioning entities. That is especially true in the downturn, which saw 375 banks fail between 2009 and 2011; federal or state banking regulators step in when that happens. "Very few of these open-door bank resolutions have taken place in our nation's history," Mr. Lambert said in an interview Thursday. The sales are the culmination of months of work to first shore up the banks' capital before looking for buyers. In December 2010, Lehman struck a deal to pump $871 million into Aurora and $275 million into Woodlands. In return, the banks dropped some $3 billion in claims they had against Lehman. The deals allowed Lehman to retain ownership of the banks, which banking regulators had eyed after their capital fell below acceptable levels. And they gave Lehman breathing room to find buyers in a tough market. While most of Aurora's assets have now been sold, it will continue to exist as a federal savings bank as its wind-down continues. Specifically, it must comply with an April 2011 regulatory order that it address "certain deficiencies and unsafe or unsound practices" in its handling of foreclosure proceedings. According to Mr. Lambert, Aurora will use the sale to carry out its compliance with the order, which he said could take up to three years. The remaining sale proceeds won't be available to Lehman creditors until Aurora has fully complied, he said. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com) Write to Jacqueline Palank at firstname.lastname@example.org.