Green Tree Tackles Bank Of America Mortgages Under Settlement
June 01 2012 - 1:46PM
Dow Jones News
Walter Investment Management Corp. (WAC) on Friday said its
Green Tree unit will begin servicing about 4,000 Bank of America
Corp. (BAC) mortgages this month as part of the bank's mandate to
hire delinquent-loan specialists under a widely watched investor
settlement.
Green Tree in October was one of nine troubled debt experts
named to tackle the estimated 300,000 mortgages identified under
the $8.5 billion faulty-loan settlement between Bank of America and
big mortgage investors including BlackRock Inc. (BLK) and Pacific
Investment Management Co.
The arrangement with so-called "special servicers" is moving
ahead despite legal challenges to the monetary settlement. Green
Tree is the fourth special servicer to receive an installment of
loans under the settlement, according to a person familiar with the
transactions.
Bondholders expect that loans in their securities will be
treated by specialists sooner, avoiding delays that often result in
higher costs and lower returns on the bonds. Having Bank of America
give up some responsibility for the most delinquent loans was a key
part of the settlement for the investors, who have trouble
obtaining information and enforcing trustees to act when they see
their bonds mishandled by primary servicers.
For Walter, the business helps replace servicing lost as other
loans mature or are retired in foreclosure. The Bank of America
loans and another expected "delinquency flow" program later this
year will provide enough business to offset the monthly runoff by
year end, Walter Chief Executive Officer Mark O'Brien said in a
statement.
Walter expects a significant increase mortgages serviced under
the settlement as it was approved to receive up to 30,000
units.
A Bank of America spokeswoman declined immediate comment.
-By Al Yoon, Dow Jones Newswires; 212-416-3216;
albert.yoon@dowjones.com