Nationstar to Acquire $10.4B in Mortgage Servicing Rights from BofA

Nationstar Mortgage Holdings Inc. (NSM) has agreed to acquire roughly $10.4 billion in residential mortgage servicing rights from Bank of America Corp. (BAC) as the mortgage servicer looks to seize more share from traditional banks scaling back in the business.

The deal is the latest for Nationstar, which already has agreements to add more than $430 billion of mortgage servicing rights, or MSRs, making it the largest non-bank mortgage servicer in the U.S. Mainstream lenders have been exiting the servicing business as concerns over new capital requirements, regulatory scrutiny and other factors weigh on banks.

“There continues to be a lot of pressure on financial institutions, a lot of pressure from a regulatory standpoint, from a customer service standpoint, from a … capital standpoint,” Jay Bray, chief executive of Nationstar, said at an investor conference Tuesday. “The financial institutions are looking very hard at reducing their residential exposure and reducing their overall servicing portfolio, and we’ve been one of the big beneficiaries of that and we think that trend is going to continue.”

As a mortgage servicer, Nationstar provides administrative functions on loans that are held by banks, government organizations, private investment funds and other owners of mortgage loans and securities. It earns revenue based primarily on the unpaid principal balance of loans serviced.

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