Home >> News >> Secondary Market >> Report: BofA Planning to Unload Another $100B in Servicing Rights
Print This Post Print This Post

Report: BofA Planning to Unload Another $100B in Servicing Rights

After ""announcing Monday"":https://themreport.com/articles/nationstar-bofa-agree-to-215b-servicing-rights-deal-2013-01-07 the sale of nearly $306 billion in mortgage servicing rights (MSRs) on 2 million loans, ""Bank of America"":https://www.bankofamerica.com/ might be looking to unload a little more.


""Reuters"":http://www.reuters.com/article/2013/01/08/us-bankofamerica-mortgages-idUSBRE9070ML20130108 first reported Tuesday that the bank is planning to sell rights on at least another $100 billion of mortgages. BofA is likely to announce more MSR sales in the next several weeks, according to two unnamed sources who spoke to Reuters.

The bank announced Monday agreements to sell ""$215 billion"":https://themreport.com/articles/nationstar-bofa-agree-to-215b-servicing-rights-deal-2013-01-07 in MSRs to ""Nationstar Mortgage Holdings"":https://www.nationstarmtg.com/ (in a $1.3 billion deal) and ""$93 billion"":https://themreport.com/articles/walter-investment-expands-mortgage-servicing-rights-portfolio-2013-01-09 to ""Walter Investment Management"":http://www.walterinvestment.com/ (in a $519 million deal).

Sales of servicing rights have become more and more prevalent as associated costs rise and servicers fall to bankruptcy, leaving hungry institutions to purchase their MSRs. The most active buyers as of late have been Nationstar, Walter Investment, and ""Ocwen Financial Corp."":http://www.ocwen.com/, which purchased the servicing rights of the bankrupt Residential Capital, LLC in a joint bid with Walter Investment.

Another factor leading the rapid transfer of MSRs is the impending implementation of Basel III capital rules, which will force banks to either hold more capital for mortgages serviced or to put less premium on the value of MSRs. As a result, more banks are trying to unload their servicing rights to cut costs.

Because servicing companies are exempt from the Basel III Accord, they can capitalize on the sales.

Sources also told Reuters that ""Ally Financial Inc.'s"":http://www.ally.com/ banking subsidiary is looking to sell $122 billion of MSRs, and ""JPMorgan"":http://www.jpmorganchase.com/corporate/Home/home.htm may try to do the same. According to Reuters, Ocwen, Nationstar, and Walter are among a handful of firms attracted to Ally's MSRs.

A BofA spokesperson declined to comment to Reuters on specific transactions, but he did say the sale of MSRs is part of the bank's strategy.
""By reducing the size of our portfolio, we improve customer service capacity and resolve legacy mortgage issues and reduce risk in our portfolio,"" he said.


Check Also

PHH to Acquire Reverse Mortgage Solutions

Ocwen subsidiary PHH expects to double its reverse servicing/subservicing portfolio through latest acquisition of HUD-, FHA- and Fannie Mae-approved servicer of reverse mortgages.

Subscribe to MDaily

MReport is here for you to stay on top of important developments in the mortgage marketplace. To begin receiving each day’s top news, market information, and breaking news updates, absolutely free of cost, simply enter your email address below.