AmTrust Bulk Deal, $20 Billion Package, Hits the Market
Bulk servicing sales, these days, come in two different types: the disposal of receivables belonging to failed or now-defunct companies, or the auction of smaller portfolios. There isn't a whole lot in between.
The largest bulk deal currently on the market is a $20 billion package of servicing rights from AmTrust Bank, a failed Cleveland-based thrift taken over by the Federal Deposit Insurance Corp. in December.
Milestone Merchant Partners, Miami, is selling the AmTrust portfolio on behalf of the government. The advisory firm declined to talk about the auction but confirmed that marketing on it is now under way.
In other pending bulk deals, EverBank, Jacksonville, Fla., is negotiating to buy a $10 billion package of residential servicing rights from Flagstar Bancorp, according to investment banking sources familiar with the matter.
A spokesman for Flagstar said the company does not comment on rumors. EverBank did not return a call about the matter. The bid price is in the range of 75 bps, said one official, but that figure could not be confirmed.In general, servicing prices have declined over the past year because of growing concerns that servicers - even though they did not originate the product - will be forced to buy back delinquent loans. (Delinquencies and refis have played a key role as well.)
According to the Quarterly Data Report, EverBank services roughly $46 billion in residential loans, ranking 22nd nationwide. If it winds up with Flagstar it would move up in the rankings to No. 20. Troy, Mich.-based Flagstar is one of the largest thrifts in the nation but its stock trades for less than $1 and it continues to lose money. In 2009 it lost $513.8 million compared to $275.4 million the year before. Despite its problems, its depository is considered "well capitalized" for regulatory purposes, with capital ratios of 6.19% for Tier 1 capital and 11.68% for total risk-based capital.
A handful of smaller bulk deals are continuing to hit the market with a somewhat steady flow of offerings from Interactive Mortgage Advisors, MountainView Capital Group, Phoenix Capital and the Prestwick Mortgage Group, among others. All of these firms are based in Colorado with the exception of Prestwick, in Alexandria, Va.