An agency servicing portfolio that Incenter has up for bid marks the first public deal above $10 billion in 2023, and there may be more where that came from.
Moreover, transactions in the $100 billion range were rumored to be potentially brewing with megabank Wells Fargo's recent announcement it'll be
Wells at deadline, was said to be mulling the idea of floating two $100 billion-plus packages: one of conventional mortgage servicing rights and another of Ginnie Mae MSRs. Rumors of the potential sales were first reported in HousingWire.
While such large sales could be economical from an operational perspective and could
"It is also possible that Wells breaks up the packages into smaller ones, which may make participation from public companies more likely," Bose George, Michael Smyth, Alexander Bond and Thomas McJoynt-Griffith said in a report issued Wednesday.
Selling a large deal could be particularly difficult in the thinner Ginnie Mae market, in which the underlying government-backed loans tend to have more delinquencies and compliance sensitivities.
"From the perspective of the regulators, there would likely be a lot of emphasis on the buyer's operations, capital levels, and track record. Overall, we think that a sale of this size could warrant scrutiny from regulators," the KBW analysts said.
Even before Wells announced it would be downsizing its portfolio, stakeholders generally expected that the mortgage servicing rights market would
In addition to the $10.17 billion agency transaction floated by Incenter, other portfolios in the market recently have included a mixed $1.29 billion package of MSRs put up for bid by the Mortgage Industry Advisory Corp. That portfolio's composition is Ginnie Mae (39.84%), Fannie Mae (36.98%) and Freddie Mac (23.18%). it's being sold by an unnamed mortgage company with a California concentration.
Weighted averages for that portfolio are: loan age, 2 months; interest rate, 5.96%;FICO score, 732; servicing fee, 0.33% and delinquency rate, 0.99%. Delinquencies are primarily 30-day lates, with a few loans in arrears by 60 days. One loan is in the 120 day/foreclosure bucket. The average loan balance is $330,065. The estimated 12-month escrow balance for the portfolio is $9.77 million.
The $10 billion-plus portfolio, which is on offer from an unnamed "well-capitalized" mortgage bank, has the following weighted averages: loan age, 20.2 months; interest rate, 2.90%; loan-to-value ratio, 71.5%; and Fair Isaac & Co. credit score, 763. The average loan size is $301,188. The portfolio's current escrow balance is $48.46 million. Its estimated 12-month escrow balance as a percentage of principal is 0.79%.
The bid deadline for the $10 billion-plus portfolio is 2 p.m. Mountain time on Jan. 25. The $1 billion-plus portfolio has a bid deadline on Jan. 23 at 5 p.m.
