Warren Buffett Wants Your Mortgage Payments: Street Whispers

NEW YORK (TheStreet) -- Few Americans are aware of it, but Berkshire Hathaway (BRK-B) has been quietly positioning itself to take over an important role played by Bank of America (BAC) in the mortgage market.

Berkshire is in a bidding war with Nationstar Mortgage Holdings (NSM) for the assets of ResCap, the nation's fifth-largest mortgage servicer, behind Wells Fargo (WFC), Bank of America, JPMorgan Chase (JPM) and Citigroup (C).

The winner will instantly become a major player in mortgage servicing, collecting debts on 2.4 million home loans. This is especially significant because the big banks--Wells Fargo excepted--are all pulling out of this business. Bank of America, in particular, has steadily been selling off mortgage servicing rights.

This week, followers of this quiet but important shift in the U.S. housing market will be looking for new details, as Ocwen Financial Corp. (OCN), the 13th-largest mortgage servicer and Fortress Investment Group (FIG) which owns Nationstar, prepare to report second quarter earnings results Thursday morning.

Fortress will be asked about its ResCap battle with Buffett, and Ocwen management may also get some questions on this topic, as they have also expressed an interest in ResCap.

Also worth looking out for are details over Bank of America's sale of its mortgage servicing rights (MSRs) on 15,000 loans. Bank of America CFO Bruce Thompson said on the bank's July 18 earnings call that the sales have been held up by a U.S. Justice Department review.

Thompson predicted a "a one to two quarter delay," but it will be interesting to hear what Ocwen and Fortress have to say, since they will surely be trying to buy the MSRs from Bank of America.

-- Written by Dan Freed in New York.

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