Congress should consider legislation to allow Ginnie Mae to expand its pass-through assistance program to give nonbanks a liquidity backstop, according to the Financial Stability Oversight Council.
Lenders continue to make bulk purchases to offset runoff in their portfolios and make up for anemic originations. However, demand for MSRs could be near a peak, according to industry analysts.
PennyMac booked a weak increase in servicing income due to a large loss tied to hedges for MSRs; First American’s CEO doesn’t expect the CFPB’s effort on lender’s title insurance to change much.
Servicing outstanding increased by an estimated 0.3% in the first quarter. Meanwhile, Mr. Cooper Group, which recently became the largest primary servicer, boosted its portfolio by 14.6% from the end of 2023. (Includes three data tables.)
Freddie and lender trade groups circled the wagons in opposition to many of the mortgage-related provisions in a proposed rule to change capital requirements for large banks.
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.
Mr. Cooper is working on an MSR fund with institutional investors, with plans for the nonbank to handle subservicing, while Rithm Capital is still planning a spinoff of its mortgage unit despite the tough market.
The flurry of bulk sales of mortgage servicing rights continued into the third quarter, helping shift market share in the GSE market to larger firms. (Includes two data tables.)