Bulk Market Waiting on TBW Rights

Some time later this year, investors might get a crack at $60 billion or so in servicing rights once controlled by Taylor, Bean & Whitaker, but for now the bankruptcy trustee overseeing the company isn't giving out many clues on when and how much.

A large portion of TBW's servicing rights are tied to mortgages sold into the secondary market with roughly 95% of them owned by Freddie Mac and the Government National Mortgage Association. (Private investors, including Wells Fargo & Co. and Bayview Financial account for the balance.)

Freddie Mac and Ginnie Mae, to date, also have declined to talk about their plans for TBW's housing receivables. Both investors are using subservicing firms to handle the processing chores once done by Ocala, Fla.-based TBW. (The nonbank lender, after attempting to merge with Colonial Bank last summer, filed for Chapter 11 in August. The FDIC seized control of Colonial.)

At one time, TBW serviced $80 billion in product but run-off and delinquencies have whittled down its size.

Meanwhile, the largest "bulk" servicing portfolio in the market is a $23 billion package of single-family rights controlled by the Federal Deposit Insurance Corp.

The FDIC inherited the receivables when it declared AmTrust Bank of Cleveland insolvent in December.

At press time the agency was in the process of taking bids on the package. The government's advisor on the sale is Milestone Merchant Partners of Miami and Washington. Sources close to the deal expect a winning bidder will not be picked until the end of June, maybe even later.

Investment bankers say interest in the AmTrust portfolio is high. A key selling point for the government is the low delinquency ratio on the package. At last check, just 3.29% of the underlying loans were late.

According to new information on the offering posted on the FDIC's website, $18 billion of the receivables have late payments of under 1%. Most of AmTrust was sold, with FDIC assistance, to New York Community Bank late last year. NYCB took control of the origination and servicing platforms but passed on most of the residential receivables.

A handful of smaller servicing packages are out in the market presently, including a $101 million portfolio from Interactive Mortgage Advisors, Denver, and a $65 million pool of rights from Prestwick Mortgage Group, Alexandria, Va.

Next in News ►