Nationstar Mortgage, Lewisville, Texas, is in the hunt for Aurora Loan Services (ALS) and appears to be the leading bidder at this point, according to investment banking advisors close to the situation.
Nationstar executive vice president Bob Appel declined to comment on the rumors except to say, “It's an interesting time in the market.”
As for giving any guidance on possible deals, he said, “We're flying as low to the ground as possible.”
For Nationstar, it's probably more interesting than for most. The nonbank, a unit of the publicly traded Fortress Investment Group, is one of the fastest growing servicers/subservicers in the nation. Its client roster includes Fannie Mae.
At the end of September, Nationstar serviced $92 billion in loans, tripling its size through MSR purchases and assignments.
If it wins the bid on ALS it will add roughly $66 billion of MSRs to its portfolio and jump to number nine in the national rankings, according to figures compiled by ASR sister publication National Mortgage News and the Quarterly Data Report.
ALS has been for sale (on and off) for almost two years. Up until recently it was still originating new loans.
Over the past six months management has intensified sale talks, negotiating with a handful of potential investors including Ocwen Financial Corp., Atlanta. But Ocwen is now believed to be out of the running. Both Ocwen and ALS declined to comment.
ALS was once controlled by Lehman Brothers, which filed for bankruptcy protection in the fall of 2008. ALS and a bank affiliate were not part of the filing, but Lehman's trustee has ordered their sale.
A senior management change is anticipated at ALS by the end of March, said one consultant close to the company.
Also, sources say two ALS executives were put on administrative leave in January but no further information was available on the situation