Fannie Bids on Conseco Servicing Op

Fannie Mae has made a $70 million "floor bid" on the servicing platform of Conseco Finance, a subprime/manufactured housing subsidiary of the bankrupt financial services giant.A company spokeswoman stressed that Fannie Mae does not want to become a servicer, but that didn't stop its critics from complaining about the move. "Hey, why don't they originate manufactured housing loans, too," quipped one West Coast mortgage banking executive. A research note put out by Federal Financial Analytics, Washington, says the bid "may be an effort to support the overall value of the Conseco paper." Fannie owns $10 billion in mortgage securities that are backed by manufactured housing loans, 70% of which are serviced by Conseco. Conseco is the largest player in the MH space. The West Coast mortgage executive, requesting anonymity, said that if Fannie is so concerned about the quality of the servicing, "I can recommend 10 good subservicers, including HomEq, Wilshire, and a few others." The official bidding for the platform begins next week. Fannie Mae can be found online at http://www.fanniemae.com.