Nearly $2B in Fannie Mae, Freddie Mac servicing is up for sale

Mortgage Industry Advisory Corp. is brokering for an unnamed mortgage banker a $1.94 billion Fannie Mae and Freddie Mac mortgage servicing rights portfolio.

The offering comes at a time when a number of industry participants, including executives at Rocket Cos. during its fourth quarter earnings call, are commenting on an uptick in MSR sales activity.

"We've heard on some recent earnings calls some folks are selling servicing now to gain liquidity and so that's great," said Vice Chairman and CEO Jay Farner. "It's a pretty significant opportunity for us as well," as Rocket has been a buyer.

Servicing sales were also a hot topic at a roundtable discussion during the Mortgage Bankers Association's recent Servicing Solutions Conference.

Despite the attractive market for MSRs, some independent mortgage bankers may want to keep owning servicing given the changing economics of the marketplace, Marina Walsh, the MBA's vice president of industry analysis, reported at a general session during the show.

"There's an incredible amount of movement when you talk to those in the space of buying and selling MSRs, there's a lot of movement of loans," Walsh said. "There's a lot of discussion over gosh, are we going to really build this up and move from using a subservicer to servicing in-house or are we going to strategically sell off our servicing in bulk sales?"

The portfolio being brokered by MIAC is being offered by a mortgage company that originates loans with a heavy concentration in California.

It consists of nearly 60% Fannie Mae actual/actual and 40% Freddie Mac accelerated remittance cycle MSRs. The average loan size is $347,215, with a weighted average interest rate of 2.791%. This portfolio's weighted average delinquency rate is 0.65% and it mostly consists of recent originations as the weighted average age is 15 months.

Its weighted average FICO score is 767. Bids are due on March 16 at 5 p.m. eastern time.