HomeBanc asks for approval of an agreement with JPMorgan for servicing of $6 billion in loans

By Reshmi Basu

New York, Sept. 6 - HomeBanc Mortgage Corp. requested court approval of a $6 billion mortgage loan servicing agreement with JPMorgan Chase Bank, NA., according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the agreement, JPMorgan will service about 37,300 mortgage loans, which amount to about $6 billion of HomeBanc's total portfolio.

As part of the plan, JPMorgan will be paid a monthly servicing fee of $560,000 per month or $15.00 per loan.

On top of that, it will also receive a float on custodial accounts of $670,000 per month and $130,000 for late charges per month.

Those fees will be paid out of the sales proceeds of the loans, HomeBanc said in the motion.

In addition, JPMorgan has agreed to provide a $75 million committed facility to provide the company with working capital.

According to the motion, HomeBanc argued that the agreement "will help to stabilize the value of the servicing business" and "give comfort to potential purchasers of the MSRs that the serving is being handled by a financially stable, non-bankruptcy entity, which should enhance the value of such MSRs."

In addition, it contended that without the DIP financing from JPMorgan, it would most likely be unable to perform its servicing duties.

A hearing is scheduled for Sept. 12.

HomeBanc, an Atlanta-based mortgage banking business, filed for bankruptcy on Aug. 9. Its Chapter 11 case number is 07-11079.

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