What We're Hearing

Details are still being worked out regarding the upcoming sale of $12 billion in jumbo servicing rights belonging to the bankrupt Thornburg Mortgage of Santa Fe. (The bankruptcy court, of course, has a say in the matter.) A source close to the deal expects that bidder turnout should be strong for a few reasons: the quality on the underlying loans is very strong and "there's no agency counter-party risk" which means Fannie Mae and Freddie Mac cannot seize the receivables and transfer them to a third-party servicer, which (given rising delinquencies and the shaky condition of some firms) is becoming somewhat of a trend. And in case you forgot: at yearend Fannie is raising its minimum net worth requirement for seller/servicers to $2.5 million...