A handful of company sales came to light this week, all involving nonbanks. The activity suggests the first quarter of 2023 could be a busy one for M&A.
Mortgage servicing rights are still a hot commodity and new investors continue to surface, but prices aren't what they used to be. One bright spot: Credit quality looks promising, at least on conventional rights.
Will investors be interested in buying shares in a special purpose acquisition company that houses a bank/warehouse lender and assets put together by fintech guru Mike Cagney? Maybe in “normal times,” but we’re not operating in normal times.
Even though originations are down roughly 50% this year, investors are still willing to buy mortgage companies, believing the downturn won’t last forever. Of the sales that have occurred, many involve asset transfers.
Most subservicing specialists have experienced tepid growth the past few quarters. The reason? A red-hot bulk sales market is one possibility. Meanwhile, a few top-ranked vendors are about to have new owners. (Includes data chart.)
It had to happen eventually: The sale of bulk MSR portfolios has lessened noticeably in the fourth quarter, with some buyers actively low-balling their bids. And if rates fall to 5.5% next year, as some predict, the days of asset markups will be in the rearview.
Some of the nation's largest direct-to-consumer lenders are taking a peek at FoA’s retail network to see if they can pick up some ancillary locations. FoA is in the midst of a massive and costly restructuring brought on by the production downturn.
Not a total surprise, but the central bank hiked short-term rates by 75 basis points this week. Mortgage rates hardly budged but residential finance professionals are worried about the quarters ahead. Meanwhile, more lenders are heading for the exits.
Mr. Cooper posted a respectable profit for the third quarter, but challenges remain. Behind the scenes, this top-10-ranked shop has been both buying and selling bulk mortgage servicing rights.
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