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Volume 2014 - Number 10

March 13, 2014

Will Investors Pay Up for PHH Mortgage? Clean MSRs, But Its Achilles Heel Might Be Its Production Platform

Private-equity firms such as Orange Capital and EJF Capital have been gobbling up shares in PHH Corp. the past year, believing the stock is undervalued. Among other things, “smart money” investors have noticed that the liquidation value of its mortgage servicing rights almost equals the entire company’s market capitalization rate. But that doesn’t mean PHH Corp. will be successful in its attempt to unlock shareholder value by selling off parts of the company, including its mortgage banking franchise and automobile fleet business. “The only thing that’s certain about PHH is that it’s trading below book value,” said one mortgage executive who has conducted business with the firm. Late this week, PHH common was selling...

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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.


No. It’s still difficult compliance/regulatory-wise.


Maybe. It’s under consideration.


Not now. But things could change as 2018 progresses.