American Home Mortgage Servicing Inc. increased its servicing portfolio by 45 percent with a purchase from a Citigroup Inc. subsidiary.
The servicer has agreed to acquire servicing rights on a portfolio of 185,000 loans from Citi Residential Lending, an announcement today said. Borrowers were notified of the servicing transfer at the end of January, and American Home will board the loans early this month.
After the publication of this story, American Home issued a statement clarifying the acquisition.
“The acquired assets consisted principally of advances made on behalf of borrowers who are in arrears and of the master servicing rights pursuant to which the loans are serviced,” the subsequent statement said. “No actual mortgage loans were part of the transaction.”
The acquisition boosts the Irving, Texas-based firm’s portfolio to 575,000 loans. American Home serviced 433,000 loans for nearly $91 billion as of June 30, 2008, according to Fitch Ratings — which improved the company’s residential primary servicer rating for prime, Alt-A and home-equity line-of-credit loans to RPS3+ from RPS3- in December.
The operations and systems of American Home include remnants of the failed Melville, N.Y.-based Alt-A lender American Home Mortgage Investment Corp. — which was acquired in 2007 by Wilbur L. Ross Jr. — and Option One Mortgage Servicing, which was acquired from H&R Block Inc. in May 2008.
American Home will be “ramping up” from 300 to 1200 employees after it moves to a new 182,700-square-foot Dallas-area headquarters in April, Jeff Thornton, senior vice president, Dallas operations, of Duke Realty told MortgageDaily.com. Although the company will immediately occupy the entire building, the employee build-up will be gradual over the following months.
Last December, American Home moved its Jacksonville, Fla., office into 76,075 square feet of a new building in Jacksonville, virtually the entire space, an employee there told MortgageDaily.com.
In other servicing rights sales, First Tennessee Bank, N.A., announced last month the sale of servicing rights on $14 billion in loans owned or securitized by Fannie Mae or Freddie Mac, leaving a remaining servicing portfolio of $48 billion. The planned closing date was Jan. 30, while the legal transfer was expected within 120 days following the receipt of customary investor approvals.
