Consumer Lending, Housing Market

Wells Fargo and Citi sell mortgage servicing rights

MortgageWells Fargo announced last week that its bank subsidiary signed an agreement to sell residential mortgage servicing rights on approximately 184,000 loans worth $39 billion to Ocwen Loan Servicing.

The 184,000 loans represent approximately two percent of Wells Fargo Bank’s total residential servicing portfolio as of the end of the fourth quarter in 2013.

Wells Fargo said the sale will be finalized as servicing is transferred later in the year. The loans associated with the residential mortgage servicing rights are mostly owned by private investors and were not originated or owned by Wells Fargo.

The announcement came after Citi announced earlier this month the sale of mortgage servicing rights for approximately 64,000 Fannie Mae residential first mortgage loans with outstanding principal balances of approximately $10.3 billion.

Citi will begin the transfer of servicing in the first quarter and will continue into the third quarter. The transaction is part of the company’s effort to align its mortgage servicing operations with business needs and to reduce assets and expenses within Citi Holdings.

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