NationsBanc Mortgage Corp. said last week it had completed two separate previously announced transactions to buy a total of $35 billion in mortgage servicing rights, increasing its mortgage servicing portfolio to about $75 billion.
The company said it had announced in February its plan to buy a $10 billion servicing portfolio from Source One Mortgage Services, Farmington Hills, Mich.
At the same time, it announced a definitive agreement to purchase a $25 billion residential mortgage servicing portfolio, a mortgage servicing operation employing about 500 people, and other servicing-related assets, from Keycorp Mortgage Inc., Cleveland.
The two transactions were the largest in a very active market for servicing assets in recent months. Some banks have been eager to acquire assets in order to benefit from economies of scale, while others have viewed the assets as risky and not sufficiently profitable to warrant retention.
Dallas-based NationsBanc Mortgage Corp. originates mortgages through 120 retail offices in the Middle Atlantic states, the Southeast, Texas, California, and Arizona.
The company purchases loans from correspondents in 36 states and serves customers through its telemortgage unit. It is a subsidiary of NationsBank Corp., the fourth-largest bank holding company in the nation, with more than $170 billion in assets.
According to Keycorp, NationsBanc Mortgage paid about $350 million for the servicing portfolio and operations, and about $150 million for servicing-related assets.
"Keycorp will continue to originate mortgages," the announcement said, but said last year its intention to sell the servicing component to focus on higher-return businesses."
No price was announced for the Source One acquisition, but industry sources said it was about $190 billion. Source One is owned by Fund American Corp., a holding company based in Vermont that has been rebuilding its investment portfolio.