While originations are expected to increase this year, margins might not improve much; First American back online following cyberattack; MSR demand expected to remain strong; held-to-maturity accounting lives on; new digital servicing platform; new buydown program.
Black Knight didn’t receive all of the damages it sought from PennyMac while the nonbank servicer is now free and clear to use proprietary technology that’s less expensive than Black Knight’s offerings.
When interest rates were low, escrow accounts were an afterthought in terms of MSR values. Now that interest rates are elevated, banks are seeing strong earnings from funds held in escrow accounts.
With the supply of MSRs expected to grow, there are concerns that prices won’t hold up. Meanwhile, the CFPB is considering incentives for lenders to retain servicing.
Delinquencies in the 30-60-day bucket are increasing in line with trends in unemployment. Foreclosures remain limited though there are concerns about borrowers with low levels of built-up equity. (Includes data table.)
Officials at FCI Lender Servicing believe financial institutions will be required to use blockchain within five to 10 years given the transparency it offers.
When servicing on auto ABS transferred earlier this year following the failure of two issuers, delinquencies on the deals spiked. Months later, defaults remain well above the levels seen before the transfers.