Dec 18 Mortgage real estate investment trust Two
Harbors Investment Corp said its unit would buy a pool
of mortgage servicing rights (MSRs) from Flagstar Bancorp Inc
for about $500 million.
Flagstar Bank will sell a portion of its MSRs portfolio to
Matrix Financial Services Corp, a unit of Two Harbors.
The portfolio of mortgage loans has unpaid principal
balances of about $40.7 billion and consists of Fannie Mae and
Ginnie Mae loans primarily originated after 2010, the companies
said in separate statements.
"We periodically evaluate the sale of MSRs as a way to
reduce the concentration of the asset," Flagstar CEO Alessandro
DiNello said in a statement.
Flagstar earlier this year settled lawsuits with bond
insurers Assured Guaranty Ltd and MBIA Inc over
misrepresenting the quality of loans underlying its
Companies such as Two Harbors and Ocwen Financial Corp
have been picking up firms that collect payments on
subprime mortgages - known as servicers - or the underlying
service rights, as banks and private equity firms look to shed
them because of new regulations and capital requirements.
Flagstar will act as sub-servicer on all of the mortgage
loans under the MSRs sold to Two Harbors.
Two Harbor's shares were up 3 percent in extended trading
after closing at $9.31 on the New York Stock Exchange on
Wednesday. Flagstar's stock, which closed at $17.98, was
unchanged after the bell.