Nationstar Mortgage to Buy ~$215B in MSRs
Nationstar Mortgage Holdings Inc. (NYSE: NSM) (“Nationstar”) announced today that Nationstar Mortgage LLC, a wholly-owned subsidiary, has signed a definitive agreement to acquire approximately $215 billion in residential mortgage servicing rights (“MSRs”), as measured by unpaid principal balance (“UPB”) as of November 30, 2012, and certain other assets from Bank of America.
Approximately 47% of the servicing portfolio, as measured by UPB, consists of loans that are owned, insured or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae, with approximately 53% of the portfolio consisting of loans in private-label securitizations. With this transaction, Nationstar anticipates adding more than 1.3 million customers to an existing customer base of 1.2 million. Nationstar's total servicing portfolio is approximately $425 billion, pro-forma for this transaction plus an additional $13 billion Bank of America government servicing portfolio acquisition that closed in Q4 2012 and Nationstar's UPB as of September 30, 2012.
The purchase price for the mortgage servicing rights is approximately $1.3 billion. The MSR portfolio purchases will close as investor and other third-party approvals are received, which Nationstar expects the majority to occur in Q1 2013. In addition to the MSRs, Nationstar will also be acquiring approximately $5.8 billion in related servicing advance receivables as the associated portfolios are boarded during 2013. Nationstar expects to enter into third-party financing agreements to fund the servicing advances.
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