NEW YORK (TheStreet) -- JPMorgan Chase (JPM) announced this morning that is will purchase the mortgage servicing rights for 266,000 high quality Fannie Mae (FNMA) loans worth an estimated $45 billion from a subsidiary of Ocwen Financial Corp. (OCN).
"Buying this prime servicing book will improve the quality of our servicing portfolio and will help drive a stronger and less volatile mortgage business," Chase Mortgage Banking CEO Kevin Watters said in a statement announcing the purchase.
"We expect the portfolio, in addition to lower delinquency rates overall, will help improve the value of our business," Watters added.
Ocwen had previously announced its intent to sell this portfolio of loans at the beginning of March.
Chase added that the acquisition is consistent with its desire to enhance the quality and efficiency of the mortgage business.
Shares of JPMorgan are up by 0.46% to $65.82 at the start of trading on Thursday morning.
Insight from TheStreet's Research Team:
I feel strongly that (1) JPM is among the best positioned money center banks, (2) the bank has the best scale of any major bank and (3) consensus earnings estimates are a bit too low for 2015 and 2016 (with the source of the potential beat in investment banking, strength in the commercial bank and in real estate).