5 mortgage servicing trends to watch

Prices in the mortgage servicing rights market Still historically strong, but as the recent negative valuation revision of public earnings shows, there has been some shift.

The relative difference in interest rates has led to volatility in high-coupon prepayments, and while home equity has generally remained strong, underwater loan rates are higher in some areas. Additionally, foreclosure numbers are higher in some markets and some delinquency rates are rising.

Below is a collection of data illustrating these digital trends. They are important for servicing buyers and lenders seeking to sell MSRs as they drive trends that may impact their asset values ​​and risk management profiles.

As the market has come down slightly from its peak, prices for services are more volatile, and as raw numbers continue to tighten, the need to sell them increases for many.

Industry veteran David Lykken said seasoned MSRs can still sell for historically high prices of 5x, as they did during the peak of interest rate hikes, but other MSRs have fallen slightly into the 4-4.5x range, or Ginnie Mae ( Ginnie Mae)’s portfolio. and executive leadership coaching.

“because Two consecutive quarters of losses But the fact is that although volumes have improved, they are still relatively low and those who retained their services found that they needed to sell for liquidity reasons,” Lykken said.

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