Pennymac asked the Financial Accounting Standards Board to clarify accounting practices involving mortgage servicing rights and recapture assumptions. The effort has support from some major MSR buyers who are looking for a level playing field.
Low volatility and actions by the Federal Reserve are expected to help maintain demand for MSRs. Supply will also be constrained, with lenders generating profits and large firms retaining their MSRs.
High MSR prices are prompting some potential buyers to sit out. Prices are being propped up by limited supply and declining servicing costs as big firms invest in technology.
Bulk transfers of mortgage servicing rights for loans held in Ginnie Mae mortgage-backed securities have gradually declined after peaking in the second quarter of 2024. (Includes two data tables.)
Prices for mortgage servicing rights remain strong as the supply of servicing for sale is declining and investors are hungry for more. MSRs tied to both low interest rates and high interest rates are being met with sustained demand.
The nonbanks took negative marks on their large holdings of mortgage servicing rights as hedges didn’t fully offset a decline in interest rates on mortgages during the first quarter.