""Ally Bank"":http://www.ally.com/ has reached an agreement with ""Quicken Loans"":http://www.quickenloans.com/ to sell the last of its remaining mortgage servicing rights (MSRs) portfolio, both companies announced.[IMAGE]
The portfolio is comprised of mortgage loans ""that are largely expected to be refinanced post-closing, based on interest rates that are above current market levels, and have an unpaid principal balance (UPD) of approximately $34 billion as of Jan. 31, 2013,"" according to a release from Ally.
The purchase price is estimated to be approximately $280 million. The transaction is expected to close in the second quarter and is subject to approval by Fannie Mae and Freddie Mac.
Earlier in the month, Ally announced ""another agreement"":http://dsnews.comarticles/ally-bank-sells-msrs-to-ocwen-for-585m-2013-03-12 to sell approximately $90 billion UPB of MSR to Ocwen.
The two agreements close the book on the bulk of Ally's mortgage activities.[COLUMN_BREAK]
Following the ""bankruptcy of Residential Capital"":http://dsnews.comarticles/allys-mortgage-unit-files-for-bankruptcy-new-strategies-announced-2012-05-14 in 2012, the bank announced it was exploring options to exit the mortgage business and has engaged with companies to sell its operations and servicing rights.
""This agreement marks a key milestone for Ally and, upon successful completion of the MSR transactions, Ally Bank will have exited all the non-strategic mortgage activities,"" said Barbara Yastine, present and CEO of Ally Bank. ""Going forward, the Bank's full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally's auto finance operation.""
Ally has announced in the past it will continue to originate ""a modest level of high-quality residential jumbo mortgages for its own portfolio through correspondents and wholesale brokers.""
At the same time, the acquisition will add to Detroit-based Quicken's growing servicing presence. In the last year, the company has built up a $90 billion mortgage servicing portfolio, making it the 17th largest servicer in the United States, according to a release. With the addition of Ally's portfolio, the company expects to break into the ranks of the top 10 servicers by mid-2013.
""We have not been bashful in making the market aware of our interest in acquiring servicing rights,"" said Quicken CEO Bill Emerson. ""This transaction with Ally Bank allows us to purchase a well performing pool of loans, and will help grow our servicing footprint. This servicing pool will also create a large opportunity for Quicken Loans to refinance a substantial amount of these clients into significantly lower monthly payments.""