Bank of America (BofA) over the past two weeks has unloaded roughly $12.4 billion of legacy mortgage servicing rights, selling most of it to Nationstar Mortgage, Lewisville, Texas.
Nationstar will acquire $10.4 billion of GSE-related MSRs for an undisclosed price, partnering with Newcastle Investment Corp., on the deal. According to a statement issued by Nationstar, New Castle, a publicly traded REIT, will get 65% of the deal.
One source said that Nationstar and/or New Castle might even “securitize the advances.”
REITs and private equity funds, increasingly, are showing a strong interest in buying MSRs.
Investment banking sources told National Mortgage News that BofA also sold a $2 billion package of private label MSRs to an undisclosed buyer.
The PLS package was known in the marketplace as "Puma." The other deal was labeled "Ganesha."
In other MSR news, Stonegate Mortgage, which currently controls $2 billion of mortgage servicing rights, hopes to almost double that amount by yearend, a company spokesman told ASR sister publication National Mortgage News.
The privately held Stonegate has been investing in MSRs since June 2009 when it entered the business by buying a servicing company’s portfolio.
Jim Cutillo, founder, president and CEO of Stonegate, told NMN that the firm is actively investing in MSRs, and funding third-party production. Its plan is to be a “provider of liquidity” Cutillo said.
Among other resources, it has a private equity fund partner that provided a $25 million investment to it earlier this year. But even prior to that investment Stonegate was already buying MSRs. (Its backers include Long Ridge Equity Partners, New York.)
Cutillo noted that the firm hopes to participate in the non-agency/Jumbo RMBS market, should that business return.
“We’re in the position to do it now,” he said. “We have the capital to deploy,” but cautioned that it is not yet doing so because “it’s not an effective execution.
“We’re in the same boat as quite of a few of the REITs in that respect,” said Cutillo, although he noted that his company could offer more “mid-Central U.S.” collateral than the real estate investment trusts, which tend to focus more on areas such as California, Arizona and Nevada.
Stonegate, he said, might also partner with REITs by providing loans to them.