New Clinton administration policies are delaying the Resolution Trust Corp.'s efforts to sell billions of dollars of mortgage servicing rights seized from failed thrifts.
The RTC is reviewing the way it awards contracts to broker the servicing portfolios, according to Carol Weatherly, the executive in charge of servicing rights.
The review will slow the sale of at least two properties, Standard Federal Savings Bank of Gaithersburg, Md., and Home Federal Savings Bank of San Diego, by 60 to 90 days.
May Cost Millions
This may end up costing the federal government millions of dollars in sales proceeds, according to industry sources.
The value of the portfolios continues to decline because of prepayments, and there is little origination capability to replace it. But the losses could be offset to some extent by the continuing flow of revenues from the servicing.
Though Standard Federal has a mortgage originations unit, it has seen its servicing portfolio, $34.5 billion at the end of 1992, erode to 27.5% billion, according to Ms. Weatherly.
Home Federal of San Diego, another RTC property, is also suffering attrition in its portfolio, according to Ms. Weatherly. However, because the RTC has bundled in assets from other properties, the amount of loans serviced has grown from $6 billion to $7 billion since Jan. 1.
The Clearwater, Fla.-based mortgage banking unit of Carteret Savings Bank of New Jersey will be especially impaired by any delay in coming to market because, unlike Home Federal and Standard Federal, it has no origination capacity.
"We want to bring Carteret to market as soon as possible," said Ms. Weatherly. Carteret was seized in December 1992.
Selection Process Changes
The section of the RTC that markets the portfolios is examining the way it contracts with brokers who then sell the properties to third parties.
"We're trying to bring our selection process more in line with the RTC as a whole," said Ms. Weatherly.
She also said the RTC wanted to do more business with brokers owned by women and minorities, in keeping with administration policy. The RTC has previously chosen brokers from a pool of pre-qualified companies.