Sales of mortgage servicing rights have been nothing short of stunning the past five quarters. Can the good times last? Yes, if prepayment speeds cooperate.
FHFA is reportedly working to re-propose updated financial eligibility requirements for Fannie/Freddie seller/servicers. The changes had been put on the back burner at the start of the pandemic.
Overall, mortgage delinquencies at the end of 2021 had returned to levels seen before the pandemic. Serious delinquency rates are elevated compared with the days before the coronavirus. (Includes data chart.)
Wells Fargo still ranks as the top mortgage servicer, but its industry-leading portfolio fell below the $1 trillion mark. (Includes three data charts.)
If rates keep rising, owners of MSRs can mark up the value of this esoteric asset when reporting first-quarter results. As for the fourth quarter of 2021, conservatism was the watchword.
Mortgage servicing rights may not seem like a particularly tempting investment. But in these turbulent times they’re attracting new interest from the private equity world.
Early reporters of fourth-quarter results are giving the mortgage industry a glimpse of what’s to come for everyone else: weak or negative origination growth. Message: The party can’t last forever.
Many of the top nonbank servicers recorded strong increases in their agency servicing rights, through both organic production and bulk MSR purchases in the secondary market. (Includes two data charts.)
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