Popular to manage $5B in former Doral Bank loans
Popular Inc., which on Friday picked up the lion’s share of Doral Bank’s assets, announced Monday it won its bid to also take over the mortgage servicing rights on three pools of residential mortgage loans serviced for Ginnie Mae, Fannie Mae and Freddie Mac held by the shuttered bank.
Combined, the loans carry a total unpaid principal balance of approximately $5 billion as of Dec. 31, 2014.
The Federal Deposit Insurance Corporation auctioned the mortgage servicing rights separately from the remainder of Doral Bank’s assets and liabilities, which were split Friday between Popular and FirstBank.
Popular will manage the portfolio for 60 days, after which the 3,000 mortgage loans will be turned over to FirstBank.
The purchase price for the mortgage servicing rights is estimated to be approximately $48.6 million, or 0.97 percent of the total unpaid principal balance as of Dec. 31, 2014.
The transfers of the mortgage servicing rights are subject to a number of specified closing conditions, including the consent of each of Ginnie Mae, Fannie Mae and Freddie Mac in a form acceptable to Popular, and other customary closing conditions, the bank said.
The transfers are expected to close within the next 60 days.
Last Friday, the FDIC and the Puerto Rico Office of the Commissioner of Financial Institutions ordered the closing of Doral Bank’s local and stateside operations. Banco Popular de Puerto Rico paid $3.25 billion for Doral Bank’s assets, part of which it sold to FirstBank.