Does Warren Buffett Want Your Mortgage Payments?

There aren’t many Americans who are aware of this fact, but the truth is that Berkshire Hathaway has been steadily and quietly putting themselves in a position where they will play an important role in the mortgage market that Bank of America, and others, are currently shying away from at this time.

Did you know that Berkshire Hathaway is actually in a bidding war with Nationstar Mortgage Holdings? They are bidding to receive the assets of ResCap, which is actually the fifth-largest mortgage servicer in the nation, behind such major financial institutions as Citigroup, J.P. Morgan Chase Bank, Bank of America and Wells Fargo.

Whoever wins this bid is going to instantly become a large player in the mortgage servicing industry, and they will have the ability to collect the debts of 2.4 million home loans once this deal is complete. The significance of the move they’re trying to make is that many of the other larger banks, with the one exception being Wells Fargo, is that they are all choosing to pull out of this facet of the financial services industry. In particular, Bank of America has been regularly selling off the rights to their mortgage servicing business.

This week is very important for the United States housing market, and we are looking for a quiet shift in this industry as new details come about. How is this going to happen? Ocwen Financial Corp., which happens to be the 13th largest mortgage servicer, and Fortress Investment Group, the company that owns a Nationstar, are going to be reporting the results of their second quarter earnings this Thursday in the morning.

You can definitely expect that Fortress is going to be asked plenty of questions about Warren Buffett’s battle for ResCap, and I wouldn’t be surprised if Ocwen management also gets questions about the specific topic, since they have expressed their own interest in purchasing the assets of ResCap.

Another potential area you might want to find out more details is with Bank of America selling off their mortgage servicing rights. They have sold the rights to over 15,000 loans so far, even though the United States Justice Department is currently reviewing them which is holding up the sales. This is according to the CFO of Bank of America, Bruce Thompson, on July 18 when his company reported their earnings.

When asked about the delay in loan sales, Thomas predicted that it would last between one to two quarters. What would really be interesting is finding out what Fortress and Ocwen have to say in regards to purchasing MSRs from Bank of America.

3 Comments

  1. Interesting article and informative article, but where are the sources? I commend Warren Buffet, and have followed his career for many years. Warren Buffet has the characteristics of very high ethical standards!! I would describe his business strategies, as trying to help this nation, not hurt it. Knowing where you live and your community, along with caring; while challenging peers, to donate where it is needed is innovative, and could only come from a man who knows. I would trust Warren Buffet, before most of the other firms mentioned. Warren Buffet is from the old school, and the old school, does not step on each other; they work with each other for a compromise to fit the communities involved. My only wish is the successor of this company has the same strong, values and ethics for the safety of this nation!! I want to thank Mr. Buffet for all of his hard work, throughout the years. Lawyers use a solution shop business model, while a big business will use alternative billing methods. "The geographical restrictions on the practice of law create a mismatch between the border-less marketing potential of the internet and the practitioner's authorized zone of practice, and only time will tell if this burdens of this model is too much for economic efficiency to be achieved." Campbell R. (2012, March, 18). {167} Finding the correct balance is the key, for global innovation.
    Electronic copy available at : http://ssrn.com/abstract=2018056

  2. I understand Mr.Buffet owns a small mortgage company called 21st Mortgage. I have my home financed through this company and just wanted to make a remark about it. I have only one thing to say about the people that work at 21st Mortgage–RUDE!I have always paid my mortgage even when I was unemployed but I still get at least one call a month from someone at this company. I have never missed a payment and can't understand why they continue to harass me!It would be different if I had never made contact with them or didn't make my payments but I do. Just wanted to say I have never been treated like this by a company that I pay my bills to every month. These people need a class on tact!! Mr. Buffet always seems to be so nice and level headed toward small time folks like me. I sure hope you would get involved in this 21st Mortgage Co. and tell them how to treat people! If you don't own it anymore, I'm sorry to have bothered you. Thank you very much!

  3. I TOO AM VICTIM OF 21ST MORTGAGE FRAUD. I PUT DOWN 38K CASH AND BOUGHT MY DREAM HOME. I'M A DISABLED 56 YR OLD WOMAN WHO'S RAISED HER TWO SONS, BOTH SERVING IN THE MILITARY. I'VE WORKED AND SAVED ALL MY LIFE, AND I MISSED ONE PAYMENT THE MONTH MY DAD DIED. I JUST FORGOT. THEY ACCEPTED A PAYMENT AFTER THEY ACCELERATED MY LOAN. I AM HOMLESS. I LIVED IN MY HOME 19 MONTHS. I AMA HOMLESS AND GAVE THEM 38K CASH.

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