Industry News

NetBank sells most of its portfolio to IXIS Real Estate Capital

Loans, mortgage-backed securities sold at $28 million loss
Published on Oct 13, 2006

Online mortgage lender NetBank Inc. has sold mortgage-servicing rights to $8.5 billion in loans -- about 70 percent of its portfolio -- and mortgage-backed securities that it held as a hedge, at a combined loss of $28.1 million. NetBank said today it sold servicing rights to Fannie Mae and Freddie Mac loans totaling $8.2 billion to IXIS Real Estate Capital Inc., while another buyer purchased servicing rights to about $230 million in Ginnie Mae loans. NetBank said it incurred a $19.3 million after-tax loss on those sales. NetBank also reported taking an $8.7 million loss on the sale of Ginnie Mae mortgage-backed securities it held as a hedge. Losses from the sales were greater than expected, but will have a positive effect on the company's bottom line, a NetBank official said in a statement. "The cost of selling these MSRs exceeded our initial expectations, but we believe the entire transaction and the timing of it serve the long-term interest of our company and shareholders," said S...

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