* Ocwen, Nationstar, Walter among bidders-sources
* Sale comes as bank offloads problem mortgages
By Jessica Toonkel and Rick Rothacker
NEW YORK, Jan 4 Bank of America Corp is
in talks to sell mortgage servicing rights on more than $300
billion of loans, two sources familiar with the situation said,
in an effort to offload problem mortgage exposure after huge
losses on its disastrous 2008 Countrywide Financial acquisition.
Ocwen Financial Corp, Nationstar Mortgage Holdings
and Walter Investment Management Corp are among
the firms that are in talks to purchase a portion of the
mortgage servicing rights, said the sources, who declined to be
identified because they are not permitted to speak to the press.
It could not be determined how much each firm would buy or
what they are paying for the MSRs. Sources said they expect a
deal to be announced within the next few weeks.
Bank of America spokesman Dan Frahm said the company does
not comment on "market rumor or speculation." Representatives of
Nationstar, Ocwen and Walter did not immediately respond.
Nationstar is looking to take the biggest position in the
mortgage servicing rights, said one of the sources.
Servicing mortgage loans - collecting payments and assisting
delinquent homeowners - has grown more expensive in the housing
bust and requires more capital under new international rules.
Bank of America is eager to reduce expenses in its mortgage
servicing unit, where costs have ballooned as the bank has added
employees to work with customers who are behind on their
payments. The bank currently has nearly 42,000 employees in the
unit, about 15 percent of its total workforce.
The bank has said quarterly expenses in the business have
peaked and should eventually fall to about $500 million per
quarter, down from $3.4 billion in the third quarter.
In November, Bank of America Chief Executive Officer Brian
Moynihan said the bank plans to reduce its mortgage servicing
portfolio to about 6 million loans, down from 8 million. At its
peak, the firm had 12 million in loans.
The No. 2 U.S. bank by assets serviced $1.1 trillion in
loans at the end of the third quarter, compared to $1.5 trillion
a year earlier.
"We continue to look at transactions," Moynihan said at an
investor conference in New York. "We have been selling
servicing in relatively sizable chunks to the market."
In June, Bank of America agreed to sell $10.4 billion in
residential mortgage servicing rights, as measured by unpaid
principal balance, to Nationstar.
Non-bank mortgage servicers such as Nationstar, Ocwen and
Walter have been buying up servicing rights from banks such as
Bank of America, Morgan Stanley and Goldman Sachs Group
Inc that were burned during the U.S. housing meltdown.