WaMu Selling $140B in Servicing to Wells

In a move that surprised the mortgage industry, Seattle-based Washington Mutual agreed late Wednesday to sell its entire government servicing portfolio and part of its conforming portfolio -- $140 billion in receivables -- to competitor Wells Fargo in a deal that will result in a loss for WaMu.According to a mergers-and-acquisitions database compiled by National Mortgage News, it is the largest bulk servicing transaction in U.S. history. WaMu values the $140 billion in servicing rights at $2.6 billion, but when all is said and done, the thrift will book a $157 million pretax loss on the sale. The receivables include: $89 billion in Fannie Mae/Freddie Mac servicing rights, $43 billion in servicing rights on FHA/VA-backed loans, and $8 billion in private investor rights. The purchase will make Wells Fargo the No. 1-ranked residential servicer in the United States. It also means that Wells will control about $143 billion of the $450 billion Ginnie Mae servicing market, or 32%. (For more details, see the July 24 issue of NMN.)