CFC+BOA=$1.9T of MSRs.

Washington -- When Bank of America finally swallows Countrywide Financial Corp. it will have a $1.9 trillion servicing portfolio and a market share of 21%. Some executives are already calling it "The Death Star" of servicing.

Then again, the target date for the sale actually closing is at least nine months away. As Mortgage Servicing News went to press this month, there was intense speculation about the deal, including doubts that it will close at the initial purchase price of $4 billion ($7 a share).

Moreover, CFC's foreclosure practices are now under investigation in a handful of states, which could cause headaches for Bank of America.

CFC - the nation's largest residential servicer with $1.459 trillion in housing receivables and a market share of 16% - saw its foreclosure rate spike to 1.44% at the end of December, a stunning 105% increase from the same period a year ago. Based on unpaid principal balances, that means $21 billion of loans that it owns the servicing rights to are pending foreclosure. (Based on number of loans serviced, the rate is 1.04% or almost 94,000 loans.)

Meanwhile, delinquencies in its gargantuan servicing portfolio increased to 7.2% at year-end, a 56% rise from Dec. 31, 2006. The company would not break out subprime delinquencies separately.

CFC has a "strategic alliance" agreement with Fannie Mae and services billions of dollars worth of agency loans for the GSE. Fannie Mae has recourse agreements with CFC, which means the seller/servicer can be forced to buy bank delinquent mortgages depending on the severity of the late payments.

CFC is headquartered in Calabasas, Calif., but its servicing operations are spread between three locations: Chandler, Ariz.; Plano, Texas; and Simi Valley, Calif.