At Least $25 Billion in MSR Sales Under Way: Cendant
One of these days Cendant Corp. will finally unload its mortgage subsidiary, but in the meantime it is testing the waters by selling a chunk of the unit's residential servicing portfolio.
As Mortgage Servicing News went to press this month, sources said Matrix Capital was taking bids on a $10 billion bulk deal of servicing rights owned by Cendant Mortgage Corp. of Mount Laurel, N.J. Which firm won the bid was uncertain. Denver-based Matrix and CMC did not respond to telephone calls.
At the end of June, CMC had $144 billion in servicing rights on its books, ranking 10th nationwide.
CMC has been on the auction block all year and even though there have been serious lookers - most notably Countrywide Home Loans, Calabasas, Calif. - a deal has yet to be consummated.
Employees at the mortgage unit are anxiously awaiting any news about the their future. One source inside CMC said rumors about layoffs are rampant at the company and many fear for their jobs.
Both CMC and its parent have kept a stone-cold silence about their immediate intentions.
One investment banking source said recently that a private-equity firm has been talking to Cendant about buying all or part of CMC.
The investment banker said the private-equity firm is working with a "nontraditional player" in mortgages. He did not know the identity of the private-equity firm.
Meanwhile, even though rates fell in September, making bulk sales harder to complete, selected portfolios of housing receivables are being sold.
One investment banker said Downey Savings of California reportedly has sold between $5 billion to $7 billion in bulk servicing rights to a large money center bank. Downey officials could not be reached for comment.
Also, at press time, C-Bass of New York, said it had just bought $8 billion in third-party servicing rights from PCFS Financial Services, Cincinnati. C-Bass also acquired $900 million in residuals tied to a pool of mortgage-backed bonds.
PCFS, a subprime lender, and its parent bank, were recently sold to National City Corp., Cleveland.
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