The One sells off profitable mortgage rights

PORTLAND — Maine Savings Bank said Thursday it had sold off loan-servicing rights on 8,000 home mortgages, which an analyst said will help the troubled thrift in the short run but hurt in the long run.

“Near term, it helps them, because it gives them capital. Long term, it hurts them, because they lose profitability,” said Gerard Cassidy, a banking analyst with Tucker Anthony Inc.

Maine Savings Bank, and its parent, The One Bancorp, both based in Portland, are struggling to recover from bad real estate loans that are forcing The One to sell banking subsidiaries in Massachusetts and Connecticut.

“They don’t have the luxury of looking three years ahead,” Cassidy said. “They have to be looking 30 days ahead.”

Maine Savings Bank said in a statement that it would not disclose the terms of its sales of the loan-serving rights to Peoples Heritage Bank of Portland.

The mortgage value of the Maine home loans was $317 million, said Roy P. Hibyan, president and chief operating officer of Maine Savings Bank.

“The gain that they could record here is between $5 million and $7 million,” Cassidy estimated. He said the bank’s strategy for getting back on its feet involves divestiture of good assets in hopes that will raise enough cash to turn around the problem assets.

Hibyan said in a telephone interview that most of the home loans in question were set up by Maine Savings Bank, then sold to investment groups that owned them while Maine Savings Bank handled the collections and paper work.

Peoples Heritage in effect has purchased the right to perform that work, with affected homeowners scheduled to start making their house payments to Peoples Heritage as of June 25. Maine Savings Bank said it will send letters this week to affected homeowners.

Hibyan said divesting the loan-servicing work is part of Maine Savings Bank’s strategy of getting smaller, but he said any jobs that become unnecessary can hopefully be eliminated without layoffs. Maine Savings Bank was glad it could sell the work to a Maine institution, Hibyan said, adding that such sales to out of state companies can cause problems for homeowners in some instances.