Colonial Buys Servicing Rights
Colonial Savings has completed the purchase of servicing rights on 18,431 home loans with a principal balance of $1.7 billion from a Midwest bank, the company said last week.
Colonial said that the acquisition will increase its servicing portfolio by 15% to $12.7 billion. It increases the number of loans that Colonial services by 20%.
The loans are secured by homes in the Midwest.
"The mortgage loan servicing business has become much more competitive over the last few years, and economies of scale have taken on greater importance in our business," said James DuBose, president and CEO of Colonial Savings, in a news release. "We estimate that this acquisition will reduce our average cost-to-service by 16% while providing us with a group of new consumers who will benefit from Colonial Savings' expertise in mortgage servicing and other products we offer."
Colonial Savings was recently awarded with a 2006 Freddie Mac Tier One Hall of Fame Servicing Award for the fourth consecutive year, one of only 15 Freddie Mac mortgage servicing companies in the nation to achieve the designation.
Colonial Savings is the parent company of Colonial National Mortgage, Community Bankers Mortgage and CU Members Mortgage. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com