Lend America's Servicing Portfolio May Change Hands
The future ownership of a $1.3bn residential mortgage servicing portfolio originally held by Lend America is in question after the Federal Housing Administration (FHA) and Ginnie Mae withdrew approval from the mortgage banker. FHA suspended Lend America from its federal insurance program in the wake of a lawsuit that revealed a pattern of mortgage fraud spanning more than 20 years across a number of mortgage firms. At the same time FHA withdrew its approval, Lend America defaulted on its approved Ginnie status, which means it could no longer issue or service mortgage-backed securities (MBS) that bear the full faith and credit of the US government. The lender's Ginnie Mae status was trumpeted in numerous high-profile industry advertisements taken out by the firm during most of 2009. Ginnie was able to transfer the mortgage servicing portfolio- - worth $1.3bn at the time of Lend America's default -- to another Ginnie Mae-approved servicer. A report Tuesday afternoon at National Mortgage News, however, indicated that GNMA may be looking to broker a near-term sale of the servicing portfolio to unnamed potential buyers. A HousingWire source with knowledge of the servicing portfolio's status said Ginnie has not yet sold it, and noted that although a the sale of the portfolio by Ginnie is possible, it does not look likely to happen soon as there are a number of administrative issues Ginnie must handle first. "It's a bit premature to be talking about a sale. They [Ginnie] still need to do some due diligence," says the source, a securities industry professional that asked not to be named in this story. Write to Diana Golobay.