Hey Mortgage Dinosaurs, Sure, We’ll Take all those MSRs Off Your Hands


In case you haven’t been paying close attention and reading the National Mortgage News website (and our paper weekly) the past year, there’s a gargantuan shift underway in the mortgage industry. We correctly predicted that the servicing side of the business is ‘deconsolidating.’ The production side is doing the same thing with the exception of Wells Fargo which has proved time and time again that it understands mortgage banking. At this point, it’s hard to say where Wells is headed, but it’s doubtful the word “exit” applies. The shift that I’m talking about is this: MSRs – mostly legacy product – are being bought at steep discounts by firms such as Nationstar, Ocwen, and IBM Mortgage because the sellers (the mega banks) want to get out. Why exit? That’s easy: because of delinquencies, regulatory (Basel III) capital headaches, headline risk and ten other reasons you probably know all about. The buyers are ALL nonbanks and for the most part they could care less about Basel III and core capital restraints. (Or have I misunderstood something?) Anyway, as long as these servicers do a half-way decent job of servicing and keep their noses clean (and robo-free) this could turn out to be the buy of the century. And it’s no secret that REIT buyers are becoming players too – PennyMac and New Castle come to mind. As the Velvet Underground once sang: “It’s the beginning of a new age”…

So, who are these servicers that are getting out? You know by reading NMN it’s Bank of America, Chase and so on. But if you need a ranking of the top 100 holders of MSRs, including number of loans, delinquencies and more drop an email to: Deartra.Todd@SourceMedia.com. It’s all in the just published 4Q edition of the Quarterly Data Report, an NMN publication…

Meanwhile, late Friday Washington analyst Karen Petrou suggested in an email that the shifting of MSRs to private equity firms will create “more risk”. Karen’s shop is called Federal Financial Analytics

And one last note about MSRs: Rates are beginning to rise. That means all the MSRs bought the past year or so are A LOT less likely to prepay. Buy low, sell high. Servicing brokers start your engines…

WAREHOUSE STUFF: Hey, has PennyMac made any warehouse lines yet? And who is eWarehouseOne.com? Our final 4Q ranking of warehouse firms is in the Monday print edition of NMN, along with our story on eWarehouseOne. Don’t subscribe? Call: (800)221-1809.

THIS JUST IN: Former top executives of jumbo lender/servicer Thornburg Mortgage (now defunct) are out trying to raise capital to launch – drum roll please – a new jumbo lender/conduit. Hey, didn’t the SEC just sue some of those guys? That’s right, but who hasn’t the SEC sued?  

THE FUTURE OF GMAC/RESCAP: Yes, it will be sold. It’s just a matter of when, and what the buyer does with it — and whether a bankruptcy is involved. If you read Ally’s SEC statements it’s clear that it’s already created a “bad bank” out of the mortgage company’s assets. GMAC/ResCap is a decent servicer and many good production people work there. This could be a good deal for someone. But is that someone Fortress Investments/Nationstar? Maybe, maybe not…

NEIL YOUNG AND PHH: Should PHH Corp. in New Jersey queue up some Neil Young? With all the executive changes going on there the past two years, Neil’s ‘For the Turnstiles’ might seem appropriate. And for all those wild MSR swings: ‘Like a Hurricane’…

WASHINGTON NEWS: Watch out for the RESPA Po-Po? Perhaps. Late this week NMN’s Brad Finkelstein reported that the Department of Housing and Urban Development is staffing up and plans to increase enforcement of the Real Estate Settlement Procedures Act, especially in regard to ‘affiliated business arrangements.’ He quoted former FHA commissioner Brian Montgomery, a co-founder of The Collingwood Group.

LOAN PRODUCT UPDATES: Look for a HARP 2.0 launch from many lenders shortly, including Cole Taylor Mortgage. Details upcoming on the NMN website. (If you have loan program notes send them to: Paul.Muolo@SourceMedia.com).

THIS COLUMN IS FOR SALE: For advertising opportunities email Steven.Schloss@SourceMedia.com. (Steve’s nickname is Bulldog.)

LOAN OFFICERS, BRAG A LITTLE: NMN and its sister publication Origination News, the most widely read news magazine in the broker/correspondent sector, has launched its annual loan officer survey. Eventually, we’ll publish features and rankings on the nation’s top LOs. To participate in our survey visit: http://originationnews.com/losurvey

DATA STUFF: If you need a list of the nation’s top 100 lenders or servicer and a ton of breakdowns check out the brand new 4Q edition of the Quarterly Data Report. Once again drop an email to: Deartra.Todd@SourceMedia.com and ask about our site license rates.

MUST ATTEND MORTGAGE SHOWS: From April 17 – 19 National Mortgage News and SourceMedia will hold their annual Mortgage Servicing Conference at the Omni Mandalay Hotel in Irving, Texas. For more information see the ads on our website or email Julie.Dienes@SourceMedia.com or click here http://www.nationalmortgagenews.com/conferences/ms/.

I’m on Twitter, discussing mortgage matters, and ‘The Final Four.’

LAST WORD: Kentucky all the way in the men’s final. As for the ladies – that would be the Lady Terps. Who else?

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