Depository institutions posted nice gains in MSR values in the fourth quarter, thanks to rising interest rates. But higher rates come at a cost in the form of lower originations.
Bulk sales of agency MSR played a role in the growth of several nonbank servicing portfolios during the fourth quarter. The market continued to shift to higher-coupon mortgages. (Includes two data tables.)
Following a strong jobs report, many economists now expect the Fed to keep rates unchanged. Also, concerns about policies from the Trump administration are helping to drive up the 10-year Treasury rate.
Nonbanks, and even some large banks, would like to keep more of the servicing rights they create this year. But if origination profits sputter, all bets could be off.
The next step to revise capital requirements for large banks is undetermined, two mortgage efforts at the CFPB will fall to a Republican appointee and FHFA’s planned reforms for the FHLBanks face uncertainty.
Is Onity Group eyeing a sale? Perhaps. And why not? Servicing values are approaching a 25-year high.
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