Detroit-based Quicken Loans Inc. announced the purchase of approximately $34 billion in mortgage servicing rights from Ally Bank. The servicing pool is comprised of non-delinquent Freddie Mac and Fannie Mae-backed mortgages that currently have higher-than-market interest rates which could substantially benefit from refinancing.
The acquisition, expected to close in the second quarter following approvals from Fannie Mae and Freddie Mac, will dramatically increase Quicken Loans' servicing footprint. In the last year, the company has aggressively built a $90 billion mortgage servicing portfolio, making it the nation's 17th largest servicer. With the addition of the $34 billion in servicing from Ally Bank, the company is expected to grow to be a top-10 servicer by mid-year.
"We have not been bashful in making the market aware of our interest in acquiring servicing rights," said Bill Emerson, chief executive officer of Quicken Loans. "This transaction with Ally Bank allows us to purchase a well performing pool of loans, and will help grow our servicing footprint. This servicing pool will also create a large opportunity for Quicken Loans to refinance a substantial amount of these clients into significantly lower monthly payments."
The company also announced that it will continue to pursue servicing pools, while also growing its servicing portfolio organically through its mortgage origination business. In 2012, Quicken Loans originated a company record $70 billion in residential home mortgages, making it the nation's third largest mortgage lender.