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Bank of America's deal with Nationstar (NSM) is just a sliver of what could be a multi-trillion...

Bank of America's deal with Nationstar (NSM) is just a sliver of what could be a multi-trillion dollar migration of servicing rights out of the big banks. The fraud closure settlement along with Basel III capital rules almost mandate the exodus. Outside of Nationstar, those set to benefit include Ocwen (OCN) (and a subsidiary, HLSS), Walter Investment (WAC), and Newcastle (NCT).
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Comments (3)
  • Patrick Harden
    , contributor
    Comments (438) | Send Message
     
    It's the new boom in mortgage-related investments. Now that excess MSRs are a good qualified REIT asset, I think you're going to see more Nationstar/Newcastle type arrangements. It's a pretty simple strategy - hold the MSRs in a tax-advantaged entity that pays a good dividend (and can constantly raise capital) - and let the mortgage company actually service the portfolio for fee income. I'm just waiting on WAC to spinoff a new mortgage REIT to hold its legacy securitizations and excess MSRs.
    8 Jun 2012, 02:42 PM Reply Like
  • Patrick Harden
    , contributor
    Comments (438) | Send Message
     
    Good overview of this phenomenon: http://yhoo.it/LB9ryU
    8 Jun 2012, 03:34 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    NSM appears overbought (expensive) here....WAC has a huge short ratio.
    8 Jun 2012, 04:39 PM Reply Like
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