Bank of America Scrambling for the Mortgage Servicing Exits
NEW YORK (TheStreet) --Bank of America(BAC) may speed up its sale of its mortgage servicing portfolio, according to a report published Thursday by Sterne Agee analyst Henry Coffey on mortgage servicer Nationstar Mortgage Holdings.(NSM) .
"For most of the last 18 months, Bank of America...has been periodically selling larger blocks of servicing and selling/subservicing $10-$20 billion blocks of servicing on a quarterly basis," Coffey writes. "In the third quarter the company transferred $19 billion in servicing. Various industry sources have indicated to us that they expect
An email message to Bank of America spokespeople seeking comment on the report wasn't returned.
Coffey added Nationstar to a "catalyst buy list," as a result of this information, while maintaining his overall "neutral" rating on Nationstar, which is majority-owned by Fortress Investment Group(FIG) .
Nationstar has been competing with other independent servicers to buy mortgage servicing assets as many companies have been moving out of the business. In one recent deal, Nationstar and Berkshire Hathaway lost out to Ocwen Financial in a bid for the servicing portfolio of Residential Capital, the mortgage unit of the former GMAC.
Wells Fargo appeared to be the only one of the big four U.S. banks interested in growing its servicing businesses, since new bank capital rules are more punitive toward mortgage servicing . However, JPMorgan Chase signaled it remains interested in growing mortgage servicing when it acquired a $70 billion portfolio from MetLife.
-- Written by Dan Freed in New York.