About three years ago, some investors – private equity firms and hedge funds in particular – started purchasing NPLs as a cheaper alternative to buying foreclosed homes.

A spokeswoman for Wells noted that loan volumes for closed-end seconds “was a small percentage of our business.”

If rates continue to head south it could result in large hedging losses and markdowns on mortgage servicing rights.

This just in: Wells Fargo mortgage chief Mike Heid to step down...

Meanwhile, Ocwen has been shifting as many of its servicing workers overseas as possible...

Both parties, to date, have declined to discuss the situation.

Meanwhile, $69.1 billion in FHA purchase and refi loans were securitized in 2Q, a whopping 93.9 percent sequential gain.

Five Oaks issued its first jumbo MBS in April and plans for another deal by the end of September.

Walter, the parent of Green Tree Servicing, also marked up the fair value of its servicing portfolio by $59.3 million.

In trading Monday, investors were not treating AAMC’s stock kindly.