FDIC Picks Milestone to Sell Amtrust Servicing Portfolio
Investment bank Milestone Merchant Partners will handle the sale of a $20bn mortgage servicing portfolio that once belonged to the failed Amtrust Bank, a source at the brokerage confirmed to HousingWire. The Federal Deposit Insurance Corp. (FDIC) hired the firm to handle the sale, which will be conducted in a competitive bidding process. The portfolio includes the servicing rights to nearly 100,000 loans. As HousingWire previously reported, the FDIC hopes to complete the sale in Q210. The Office of Thrift Supervision (OTS) closed Cleveland, Ohio-based AmTrust on Dec. 4. The FDIC, as receiver, entered into a purchase and assumption agreement with Westbury, New York-based New York Community Bank (NYCB), which reopened the 66 AmTrust branches as NYCB locations. NYCB did not pay a premium to assume all $8bn of AmTrust’s deposits, and purchased $9bn of the failed bank’s $12bn in assets. The failure is estimated to cost the FDIC deposit insurance fund $2bn. That purchase and assumption agreement included NYCB taking over the loans, the source said. In addition, NYCB is responsible for servicing the loans for up to a year while the FDIC finds a buyer for the servicing rights. Write to Austin Kilgore.