Top contributors to the deal include 5th Street Capital with a 42.8% share and Sprout Mortgage (41.0%). Servicing is being divided among Specialized Loan Servicing (62.4%), Fay Servicing (31.4%) and Lima One Capital (6.2%).
Nonbanks with large servicing portfolios are generating high margins from originations. The production is focused on agency mortgages, as nonbanks have largely stopped originating non-agency loans.
It’s not final yet, but servicers stand to make at least $500 per unit to handle GSE loans that need to be deferred because of COVID-19-related hardships.
The gap between when prepayment proceeds are received and when the funds must be transferred to agencies provides an opportunity for servicers to use the funds for forbearance-related advance payments.