The nonbank revealed it anticipates “roughly break-even net income” for the second quarter, excluding potential mark-to-market gains on its massive MSR holdings...
Servicing bids are off their highs for the year, but the situation could be temporary. As originations wane in the quarters ahead, nonbanks could flood the market with more auctions.
How do you know when a mortgage cycle has reached its nadir? When originators produce loans at a loss. We’re not there yet but we could be close. Meanwhile, just because a lender announces a stock buyback that doesn’t mean it will happen.
When rates increased substantially in the first quarter, many nonbanks moved aggressively to mark up the asset value of their MSR portfolios. There’s nothing wrong with that, but the volatile nature of servicing makes regulators nervous. (Includes data chart.)