Jan 22 Wells Fargo & Co said on
Wednesday that it would sell Ocwen Financial Corp the
right to collect payments on 184,000 home loans representing
roughly 2 percent of its residential portfolio.
The total principal balance on the loans is $39 billion.
Terms of the deal were not disclosed.
The sale of the servicing rights comes as new companies like
Atlanta-based Ocwen, which focuses on collecting payments on
residential and commercial mortgages, have driven up demand for
The higher prices make it more attractive to sell some of
the rights for both financial and risk management reasons, Wells
Fargo Chief Financial Officer Tim Sloan told investors at a
Sloan also said that any sale would focus on customers who
use Wells Fargo only to service their mortgages. The San
Francisco-based bank neither made nor owned the underlying
mortgages in Wednesday's deal.
Many lenders have also felt pressure to sell large
portfolios of mortgage servicing rights in recent years because
of new international capital rules.
Wells Fargo collects payments on nearly one out of every
five U.S. home loans, making it the largest mortgage servicer in
the country, according to Inside Mortgage Finance, an industry
The parties expect to complete the sale later this year.