Many potential buyers haven’t been able to take advantage of low mortgage rates because home prices have increased faster than income, limiting affordability.
Working from home is going pretty well for lenders, with some reporting increased productivity and only one out of 33 surveyed noting a reduction in profits.
As borrowers in prime non-agency MBS transition out of forbearance plans, investors in the deals could experience reduced cashflows due to interest shortfalls.
Various announcements by Ginnie, FHFA and the GSEs helped investors in MSRs get more comfortable in recent months. Meanwhile, use of Ginnie’s PTAP financing option remains minimal.
The flow market for MSR sales is returning to normal after COVID-related volatility in March and April caused demand for MSRs to wane. Traditional sellers of MSRs retained servicing this summer, helped by profits from the refi business.
While the share of loans in forbearance continues to decline, the borrowers who remain in relief could be more difficult to help, according to industry analysts.