When rates rise, holders of MSRs can benefit by increasing the value of this esoteric asset. Now that the second quarter has ended, the biggest beneficiaries will be shops that took it easy when it came to hedging.
Director Rohit Chopra noted borrower hardships due to excessive paperwork, as well as fees and negative credit reporting events that occurred while a loss-mit application was under review.
The tide is starting to turn in favor of servicing sales where higher note rates are involved. Don’t expect premium prices or a tsunami of deals, but at least it’s an outlet.
Cenlar, the big kahuna of subservicing, could be poised for explosive growth. There’s just one problem: The outsourcer is still operating under OCC-imposed limitations. But for how much longer?
Banks continued to build their retained mortgage portfolios, but mostly with fixed-rate mortgages, while borrowing costs rose significantly. The agency MSR market is slowly shifting toward higher-coupon loans. (Includes three data charts.)
CFPB Director Rohit Chopra said the mortgage market would see severe disruption if the Supreme Court finds the bureau’s funding structure unconstitutional.