Two high-profile real estate investment trusts – Annaly Capital Management and New Residential Investment Corp. – appear to be refining their investment strategies these days, heading in different directions in terms of what asset classes they prefer. New Residential is continuing to make huge bets on mortgage servicing rights. According to its just-released earnings statement, the investor is showing no reluctance whatsoever when it comes to size. A new tally from Inside Mortgage Finance shows that New Residential ended the second quarter with $353.0 billion of “full servicing” rights in its possession, up 40.1 percent from March 31. A year ago, the REIT wasn’t...
This week, the government-sponsored enterprises reported combined earnings of $4.86 billion in the second quarter, which was down 2.4 percent from the first three months of the year. The two GSEs’ fortunes went in opposite directions: Fannie’s net income rose 15.4 percent from the first quarter while Freddie’s was down 24.7 percent. Fannie CEO Tim Mayopoulos said...
BofA CEO Brian Moynihan: “Now, the answer is, we just retain the mortgages and frankly the credit quality on ours is not worth paying the insurance [associated with selling loans into MBS].”
The secondary market in mortgage servicing rights heated up during the second quarter of 2017, fueling further growth by nonbanks in the servicing business. An estimated $133.36 billion of MSR changed hands during the second quarter, according to an analysis by Inside Mortgage Trends, an affiliated newsletter. That was up 21.5 percent from the first three months of the year, and brought total MSR transfers to $243.14 billion at the midway point of 2017, up 53.6 percent from a year ago. Most of the activity has been...[Includes three data tables]
Firms that sell mortgage servicing rights for a living are conducting more privately negotiated transactions these days, reserving the auction process for smaller deals, according to interviews with industry dealmakers. “We’ve seen a good amount of these lately,” said Steve Harris, managing director of MIAC Capital Markets, New York. “Word gets out who the buyers are; the sellers find out and they decide to do a privately negotiated deal. And there are companies out there with substantial portfolios [that are available for sale].” One selling firm that reportedly went the private route after trying an auction is...
For years, big banks have delivered nearly all of their conforming mortgage production to the government-sponsored enterprises and retained their jumbo mortgages in portfolio. But some big banks have changed tactics, exploring differing execution options for their originations. Paul Donofrio, CFO of Bank of America, said the bank retained about 90.0 percent of its mortgage production on balance sheet in the second quarter of 2017. BofA had $18.0 billion in originations during the quarter, including first mortgages and home-equity loans. The loans retained...
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