Bank of America to sell service rights on $100 billion of mortgages

09.01.2013 12:40
Bank of America to sell service rights on $100 billion of mortgages

YEREVAN, January 9. /ARKA/. Bank of America Corp is looking to sell collection rights on at least another $100 billion of mortgages after announcing similar deals for more than $300 billion on Monday, according to two sources familiar with the situation, Reuters reports.

Any sale would be the latest example of a big bank deciding that collecting mortgage payments on some loans is too costly, and the cost of capitalizing the business was too high given new capital rules. Banks have been unloading these assets for years.

These sales are an opportunity for smaller companies like Nationstar Mortgage Holdings and Walter Investment Management that specialize in managing these collection rights, known as mortgage servicing rights, and do not have to follow bank capital rules.

Bank of America said on Monday that Nationstar was buying servicing rights on $215 billion of mortgages for $1.3 billion, and Walter Investment was buying servicing rights on $93 billion of mortgages for $519 million.

Ally Financial Inc's banking subsidiary is also looking to sell $122 billion of mortgage servicing rights. Ocwen Financial Corp, Nationstar and Walter are among a handful of firms looking at purchasing a portion of Ally's MSRs, according to the sources.—0-


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