Asset manager and mortgage servicer Walter Investment Management Corp. continues to eye mortgage servicing rights as acquisition targets, and it seems ResCap's MSRs are now in the company's line of sight.
The company said in a quarterly filing that its pipeline of potential transactions includes assets from the ResCap bankruptcy auction process.
Analysts with Compass Point Research & Trading elaborated on the potential acquisition saying Walters Investment and another entity (presumably Ocwen) are trying to buy approximately $50 billion of MSRs from the ResCap bankruptcy.
The targeted pool includes GSE loans, subservicing contracts and other assets looped in with the bankruptcy proceedings.
The deal is in line with the company's stated objective of growing its business "through multiple channels such as adding subservicing contracts to our portfolios through one time transfers and flow agreements, acquiring additional mortgage servicing rights ('MSRs') and servicing platforms," ResCap said in a filing. In addition, the company said it's growing its own origination business and making strategic acquisitions.
Compass Point said it's increasing the servicing unpaid principal balance for Walter Investment Management.
"Walter confirmed their near-term pipeline increased from $22 billion to $60-plus billion, of which over half is sub-servicing agreements," Compass Point wrote. "We have updated our estimates for servicing UPB and now estimate WAC will win bids for $3 billion of new UPB in 3Q12, $20 billion in 4Q12, $15 billion in 1Q13 and a run rate of $7 billion in new servicing UPB per quarter thereafter."
If the estimates prove correct, Walter Investment could very well end the year with a servicing portfolio of $147 billion, Compass Point suggested.