The increasing rate of mortgage servicing rights transfers may have peaked the interest of the Consumer Financial Protection Bureau, which last month expressed “heightened” concern over the high volume of MSR transfers, but that hasn’t stopped sellers from bringing another massive portfolio to the market.
A $4 billion bulk MSR portfolio backed by Fannie Mae is currently out for bid, according to Interactive Mortgage Advisors, which is acting as the exclusive broker for the offering.
The offering comes on the heels of more than $5 billion in MSRs being offered for sale in August. With this $4 billion offering, that brings the total MSR offerings since April, when Ocwen Financial (OCN) Executive Chairman William Erbey called the MSR market “frozen,” to at least $18 billion.
In April, Erbey said that the entire mortgage servicing rights market was stopped by the New York Department Financial Services, after the DFS put a $2.7 billion MSR deal between Ocwen and Wells Fargo (WFC) on an indefinite hold.
But despite the increasing scrutiny from the NYDFS and the CFPB, a “well-known” Federal savings bank with “experienced senior management” in MSR sales is bringing $4 billion more in MSRs to the market, according to IMA.
“This is a great package of mortgage servicing providing an opportunity to purchase Fannie servicing of size,” IMA said in its portfolio prospectus.
According to IMA’s report, the portfolio carries a weighted average note rate of 4.032% and the underlying loans have an average balance of $204,000.
The borrowers in the portfolio carry a weighted average FICO score of 756.
IMA’s report states that the largest percentage of the underlying loans are from the state of Texas. According to the report, 30.4% of the loans are from Texas and 24.8% of the loans are from California.
IMA reports that there are “practically no delinquencies” within the portfolio as well.
“The entire process will run smooth due to this experience and allow for you, as the successful purchaser, to book a sizeable MSR deal prior to year-end,” IMA said.
“Any prospective purchaser must be an approved Fannie Mae Servicer or have a structure in place with an approved Fannie Mae Servicer who can take ownership and service on your behalf,” IMA notes. “The seller will consider offers to sub-service back.”
Bids for the offering are due to IMA by 2:00 p.m. Eastern on Sept. 10.