First Horizon Continues Mortgage Pullback
Memphis-based First Horizon National Corp. (FHN), the bank holding company for First Tennesse Bank, said Wednesday morning that it bank had sold mortgage servicing rights on $14 billion of first-lien mortgage loans owned or securitized by Fannie Mae (FNM) or Freddie Mac (FRE). The move comes as First Horizon has aggressively been pulling back its national mortgage footprint amid continued industry upheaval. The sale reduces the outstanding balance of first lien loans for which First Tennessee holds the servicing rights to $48 billion, from a peak of about $100 billion a year ago, the bank said in a press statement. "While not material to overall quarterly financial results, the transaction is reflective of First Tennessee Bank's ongoing strategy to reduce its investment in mortgage servicing rights," the company said. The sales agreement was signed Tuesday, with a sale date and closing date of Jan. 30, 2009, with legal transfer expected within 90 - 120 days following the receipt of customary investor approvals. Details on the purchasing party were not provided. First Horizon reported a $55.7 million Q4 net loss on Jan. 16, after reporting heavy losses in mid- and late-2008 and receiving a $866,540,000 injection from the U.S. Treasury's TARP as a transaction under the Capital Purchase Program on Nov. 14, 2008. Write to Paul Jackson at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.