MSRs and REITs, a New Business Model?


Wednesday morning we were greeted with the news that an affiliate of Newcastle Investment Corp. – a publicly traded REIT – has agreed to pay almost $44 million to Nationstar Mortgage in exchange for receiving 65% of the interest payments on a $9.9 billion pool of MSRs. (Click here for full details.) The deal is significant because it marks the first time that a REIT has invested in MSRs (as opposed to say, MBS.)  As the nation’s megabanks continue to exit the servicing business, it would appear that REITs potentially could become large players in MSRs – not as actual servicers, but as investors. It also means the future of subservicing firms the likes of Cenlar, Celink, Nationstar, Green Tree, RCS and a host of others is looking quite bright. Stay tuned.

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