Wells Fargo will take over $51 billion in mortgage servicing rights from Seneca Mortgage Investments, the bank announced Thursday. According to its website, Seneca Mortgage will no longer service mortgage loans of any type.
All loans in the acquired pool are conventional/conforming mortgage loans that are guaranteed by government-sponsored enterprises Fannie Mae and Freddie Mac.
Franklin Codel, Head of Consumer Lending at Wells Fargo, said the bank is making all efforts to ensure a smooth transfer for existing Seneca customers. Borrowers whose loans were previously serviced by Seneca will be receiving a Notice of Servicing Transfer in the mail, as well as welcome information from Wells Fargo. The transfer of all servicing responsibilities should be finalized by the end of the fourth quarter.
"We look forward to the opportunity to provide excellent service to these new mortgage customers and are committed to making this a smooth transition for them," Codel said. "Mortgage servicing is an attractive, core business for Wells Fargo, and this transaction provides an opportunity for us to strategically enhance our servicing portfolio."
According to the announcement, data on the performance of the newly acquired loans will be released in the bank's third-quarter financial results. The acquisition will bring Wells Fargo's total servicing portfolio to over $1.5 trillion. The bank is the largest servicing of residential mortgage loans in the U.S.
The acquisition announcement comes just days after Wells Fargo uncovered 1.4 million additional accounts fraudulently opened in its customers' names. Spurred by "unacceptable sales practices," according to CEO Timothy J. Sloan, the accounts will cost the bank around $6 million in refunds. Sloan told the Washington Post last week that his organization is "working hard to ensure this never happens again and to build a better bank for the future."
To view today's full announcement, visit WellsFargo.com.