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WaMu's $140B Mortgage Servicing Portfolio Bought by Wells Fargo |
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Thursday, 20 July 2006 |
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On Wednesday, Wells Fargo said that it has agreed to buy Washington Mutual's entire portfolio of government mortgage servicing and a portion of its conforming, fixed-rate portfolio, totaling $140 billion and representing about 1.3 million servicing customers. As part of the deal, Wells also will acquire WaMu's Milwaukee servicing operation.
The transaction will allow Washington Mutual to focus on more profitable products and businesses while letting Wells take advantage of the tremendous fixed costs involved with servicing mortgages. Wamu's total servicing portfolio after the transaction is completed will include 4 million customers with outstanding principal balances totaling $692 million. Mortgage servicing is the business of collecting payments from borrowers and providing customer service. Wells has grown its mortgage servicing portfolio at a compound annual growth rate of 25 percent since 1995. Today's acquisition will boost the San Francisco bank's mortgage servicing portfolio by 13 percent. By Mabelle Sese
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