What goes down must go up again? That seems to be the story of the fourth quarter’s revival in agency MBS values. Declining mortgage rates gave agency securities holders a shot in the arm.
Mortgage REIT Two Harbors hopes to save a ton of money by servicing its $215 billion-plus MSR portfolio in house. It also wants to be a major player in the subservicing arena and is building an origination platform to protect against a refi wave.
Not every mortgage company can issue unsecured notes at a decent price, but a handful of larger shops can, especially if they own a ton of servicing rights.