The Federal Deposit Insurance Corp. is preparing to sell a large piece of the failed AmTrust Bank's servicing portfolio, investment banking sources said.
The servicing rights, on roughly $20 billion of loans, could hit the market by the end of January.
Before regulators seized it on Dec. 4, AmTrust serviced about $30 billion of loans, most of which have been sold to Fannie Mae and Freddie Mac.
AmTrust was a national correspondent and wholesale lender, concentrating on loans headed for the government-sponsored enterprises.
New York Community Bancorp Inc., which bought most of AmTrust from FDIC (though not the servicing rights), said it plans to keep the failed institution's wholesale mortgage business.
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Corrected December 29, 2009 at 5:20PM: An earlier version of this story misidentified the seller. New York Community Bancorp Inc. bought most of the failed AmTrust Bank but not the mortgage servicing rights; those assets stayed with the FDIC, which is now preparing to auction them. The story also said New York Community had not decided what to do with AmTrusts wholesale mortgage business. New York Community said Tuesday that it has decided to keep that business.