Mortgage market starting to return to normal (whatever that means.)

The rapid increase in interest rates seen in the first quarter took a big bite out of income from production and helped to goose servicing earnings. And while a downturn in originations was expected this year, it could be worse than expected.

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.

Owning mortgage servicing rights proved to be a great counter-hedge to an ugly origination market in the first quarter. At least two nonbanks benefited: Mr. Cooper and New Residential Investment.

Bulk MSR transfers were down in the first quarter, with a number of pending deals yet to close. Coissuance saw a boost in its share of agency securitization. (Includes three data charts.)

University of Maryland professor Clifford Rossi says Fannie Mae and Freddie Mac are discussing ways to proactively deal with risks of climate change.

With interest rates starting to rise, production income took a hit in the fourth quarter of 2021. While servicing income increased, the mortgage business was less profitable. (Includes data chart.)

Are mortgage servicing rights still a safe bet to buy? Looks that way, especially if mortgage rates keep heading north.

Negative outlook for margins; number of foreclosure starts declined in February; MBA launches affordability index; MISMO seeks participants and input on new initiatives.

Foreclosure starts increased in February; SEC to revamp cybersecurity reporting for public companies; Tradepost acquires GSF Mortgage as part of an expansion of Go Companies; Milo raises $17 million; MISMO to develop standards for eVaults.