The top cop at the Federal Housing Finance Agency is looking for an analytics firm that can advise the agency on what mortgage servicing rights are worth. But a big question about the contract remains unanswered: Why?
In a question-and-answer sheet posted on a Treasury Department website, the agency asks whether the contract is tied to Fannie Mae's third-quarter purchase of $74 billion of MSRs from Bank of America.
The answer FHFA provides to that question reads: “The government reserves the right to not release that information.”
A spokeswoman for the inspector general's office of the FHFA declined to discuss the contract with this publication.
Meanwhile, the rest of the servicing industry is talking about it.
And yes, most believe the contract was spurred by Fannie's third-quarter purchase of $74 billion of MSRs from Bank of America.
To date, no purchase price has been released on the portfolio and both parties to the deal will not discuss the matter at all. In the past, a spokeswoman for Fannie has maintained that the GSE is not in the servicing business.
Servicing advisors speaking under the condition their names not be published contend that Fannie bought the MSRs for more than what B of A had the asset valued at. But these advisors also believe that by placing the MSRs—16% of which are delinquent, they say—at a specialty servicer Fannie ultimately will improve the overall performance of the portfolio, resulting in a good deal for the government controlled GSE.
In the “request for proposal” posting, the IG's office is specifying that it wants a “small business” firm with revenues of less than $7 million. It also wants the evaluation firm to provide it with a set price for the contract.
One executive who plans to bid on the contract told this publication, “I believe that Fannie is threatening the viability of the industry for small to midsized servicers through this agenda of taking over (or purchasing, however you want to call it) MSRs and through their campaign for an alternative service fee.”
He added that Fannie has in place partnerships “with large special servicers who ultimately benefit by Fannie's current actions.”
One of Fannie's special servicers is Seterus, a unit of IBM. This source said that every loan “serviced by IBM is owned by Fannie.”
Seterus has declined to discuss its contracts with Fannie.
