Monthly Archives: July 2013
Part II in a Two-Part Series from MorVest Capital, LLC as seen in the Mortgage Banking Update by the Mortgage Banking Group at Ballard Spahr
In Part I of this series, we reviewed some of the fundamental considerations inherent to retaining mortgage servicing rights (MSR), including updating capital plans with sophisticated pro forma analysis, “retain versus release” considerations, and determining the appropriate amount to be capitalized. A number of other decisions must be made.
Part I in a Two-Part Series from MorVest Capital, LLC as seen in the Mortgage Banking Update by the Mortgage Banking Group at Ballard Spahr
Many depository institutions and mortgage companies have begun to accumulate servicing portfolios over the past two years, a compelling opportunity. They can add mortgage servicing rights (MSR) at effective price levels well below the historical market average, producing excellent long-term cash flow and earnings. These MSRs are primarily on loans these companies originate, but also can be from purchases of whole loans (correspondent) or purchase of existing MSR (bulk) from others. The recent run-up in mortgage rates highlights the advantage of retaining servicing, as increased MSR valuations will help to offset reduced pipeline valuations and lower origination volume. These valuations can vary significantly, however, according to state, product type, servicing remittance type, and other variables. Retaining servicing is also capital intensive, with further working capital demands for servicing advances over time. This two-part series provides a brief overview of issues to consider when embarking on an MSR retention strategy.
Tuesday, July 9, 2013 | as of 8:56 AM ET
Mortgage servicing rights remain an attractive acquisition target, especially when factoring in how much stake big players such as Ocwen and Nationstar are willing to take in MSR acquisitions.
But for other firms that want ‘in on’ the mortgage servicing rights buying spree, financing is usually needed.
This is where Sugarland, Texas-based MorVest Capital steps in.
CLICK HERE to read the full HousingWire.com article…
© 2013. MorVest Capital.