Seeking Alpha

Bank of America (BAC) is in talks to sell more than $300B in mortgage servicing rights, reports...

Bank of America (BAC) is in talks to sell more than $300B in mortgage servicing rights, reports Reuters. The usual suspects: Ocwen (OCN), Nationstar (NSM), and Walter Investment (WAC) are among the firms angling for a piece. All 3 have jumped nicely higher in the last few minutes.
Comments (4)
  • Let's try to pay closer attention to details in 2013... it's $300 BILLION in MSRs, not million.
    4 Jan 2013, 04:05 PM Reply Like
  • I was going to say...... isnt 300M the board's lunch tab?
    4 Jan 2013, 04:08 PM Reply Like
  • I'm not clicking on these links to publication advertisements - but if it entails actual selling of mortgages, they probably are going to find more moving into the performing loan category and BAC would be selling for more than what they are being carried on the books. This would result in a accounting correction/gain and they will have to pay the tax on the deferred income. Then the other assets may have to be marked up to show more assets on the balance sheet. This liquidity flood for BAC continues.
    4 Jan 2013, 04:25 PM Reply Like
  • Is this thinking correct concerning the value of this deal? $300B in rights represents about 1.5M mortgages (at $200k each). I recall from previous MSR sales that they have sold for about $1000 apiece. So, that would be about a $1.5B deal, plus or minus.

     

    I don't think the article says they are selling the mortgages - this deal is for the service rights. The mortgages have probably already been sold. Wonder why they would be selling these now as mortgage servicing is set to be a good money maker as the number of foreclosures return to more average (normal?) level.
    6 Jan 2013, 09:21 AM Reply Like
DJIA (DIA) S&P 500 (SPY)