Ginnie Mae is currently conducting one-on-one discussions to help issuers better understand the reasoning behind its new financial eligibility requirements that are set to take effect next year, the agency’s President Alanna McCargo said.

MCT and Freddie Mac experts discussed the strategies of managing MSR assets. While some firms are interested in the best financial deal they can get, others are focused on retaining clients.

Before the pandemic, lenders sold their MSR 80% of the time but after COVID, they retained 70% of their MSRs. Now, the split is 55/45.

The new standards are a result of a collaboration between Ginnie and the Federal Housing Finance Agency to align rules for their counterparties. Most of the new standards take effect Sept. 30, 2023.

The market for MSRs is now divided between portfolios with loans originated prior to 2022 and portfolios with loans that have prevailing interest rates, prompting some shifts in practices among servicers and investors.

The ratio measuring the fair value of banks’ mortgage servicing rights compared with their servicing for others hit a post-2008 high as of the end of March thanks to the spike in interest rates.

According to new research paper, nonbanks use their MSRs to help fund operations in a rising rate environment, resulting in stronger originations in comparison to banks.

Rising mortgage rates and Treasury yields cause MSR valuations to spike.

Industry groups take sides in debate over FHFA’s treatment of nonbank servicers.

Early comments suggest widespread concern that the proposed increases in liquidity and capital requirements for GSE seller/servicers are unnecessary and maybe counterproductive.