Bank of America Sells More Mortgage Servicing Rights - Deal Journal - WSJ
Bank of America shed a bit more of its mortgage business on Tuesday.Associated Press
The bank sold another chunk of mortgage servicing rights, the value it ascribes to the work it does on mortgages, a value that had shrunken as mortgage rates have plunged.Nationstar Mortgage said it was acquiring the portfolio, which it said was $10.4 billion as measured by the unpaid principal of the loans.Bank of America accounts for mortgage servicing rights by the future revenue it expects to earn and had about $7.6 billion on its books as of the end of March. The bank had a total $112.4 billion of loans in its consumer real-estate unit at that time.Recent quarters for the bank have been hit with volatile changes to the mortgage-servicing-rights value, including several large writedowns the bank has ascribed to the weak mortgage markets. Chief Executive Brian Moynihan has made paring back operations that aren’t essential to customers a key objective and said part of that would be selling these mortgage servicing rights.In 2011, the value of its mortgage-servicing portfolio fell to $7.4 billion from $14.9 billion, largely because the lower mortgage rates led borrowers to refinance their loans, reducing Bank of America’s expected cash flow. The bank also sold nearly $900 million worth of the mortgage servicing rights in the year.Moynihan has said recently that the bulk of the asset sales by Bank of America are done, but that mortgage servicing rights remain on the block.Nationstar, which services about $103 billion in loans at this time, said the loans it was purchasing were from Fannie Mae and Freddie Mac, the two government-sponsored enterprises that Bank of America has been feuding with on other fronts.