Merger and acquisition activity is heating up, but most of it centers on mortgage servicing rights, huge blocks of it. Not only is SPS in play, but so too is SLS.
Servicing valuations are starting to inch downward, but not dramatically. The good news: Investors still want the asset and prices are holding firm. One notable: More MSR owners are hedging the asset these days.
Mr. Cooper hopes to surpass the $1 trillion mark as a servicer/subservicer, an event that could happen by yearend if it keeps gobbling up portfolios. Meanwhile, there’s plenty of MSRs to buy.
In what appears to be a response to recent bank failures, Freddie has said servicers are responsible for any losses out of custodial accounts if a depository goes bankrupt.
Prepayment speeds are at historic lows, but Fannie reported a net decline in single-family MBS outstanding during the first quarter, and Freddie was up just 0.1%. (Includes two data charts.)
The bank liquidity crisis — although it had nothing to do with mortgages — slowed activity in the MSR sales arena. However, some buyers, including federally insured depositories, hung in there, picking up bargains.
Home Point, which once boasted a workforce of several thousand, soon will be down to a skeleton crew of 60 or so. Chances are, it will sell its servicing portfolio and call it a day. But it may not be alone on that score.
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