Bank of America Auctions $14 Billion of Mortgage Servicing Rights

Bank of America this week auctioned off $14 billion worth of residential mortgage servicing rights, according to bidders and advisors close to the situation.

One investor who looked at the package said the delinquencies on the portfolio—dubbed "Hollywood" by B of A—were in the 18% range. The bid deadline was Wednesday, said one source.

This source added that MSRs are tied to Government National Mortgage Association-backed assets.

At deadline a spokesman for B of A had not responded to a media inquiry from NMN.

In the past, the Denver-based Phoenix Capital has been advising B of A on MSR transactions. Phoenix has a policy of not talking to the press.

Over the past year B of A has been a steady seller of MSRs. In August the bank had a $7 billion package in the market.

In the third quarter of last year B of A sold a $74 billion portfolio of MSRs to Fannie Mae, a transaction that was recently the subject of an audit by the Inspector General of the Federal Housing Finance Agency.

Fannie Mae has been quietly financing MSR purchases by some of its subservicers.