Monthly Archives: March 2014
Tuesday, Mar 4, 2014
By Paul Muolo
Customers Bank, Wyomissing, PA, has launched a new program that will provide buyers of mortgage servicing rights with what it calls “longer term” financing. The bank’s advisor on the program is MorVest Capital, which has been working on the concept for at least two years.
According to materials provided to IMFnews, the term loans run from five to six years. MorVest President David Fleig said the program will provide liquidity “critical for mortgage bankers not affiliated with a depository institution to maximize best execution and build a servicing portfolio.”
In addition to its advisor role, MorVest will purchase a participation in each MSR loan made by Customers Bank. Over the past two years, banks have been more willing to lend against MSRs, but mostly in the form of working capital loans that usually expire within a year.
Tom Piercy, managing member of Interactive Mortgage Advisors, said he is pleased “to see this type of structure for MSR financing entering the market” but noted that the loan program “is not for everyone and the lender will not approve everyone.” For now, Customers Bank has committed at least $200 million to the effort.
February 28, 2014
MorVest Capital has announced that it is serving as exclusive advisor to Customers Bank (Nasdaq: CUBI) on its mortgage servicing rights (MSR) term lending program. Customers has committed at least $200 million to finance retention or purchase of MSR by selected mortgage bankers. This is the only MSR lending program which currently offers longer term financing of MSRs (5 to 6 years), providing the liquidity critical for mortgage bankers not affiliated with a depository institution to maximize best execution and build a servicing portfolio. The longer duration of the Customers term loan effectively matches duration of the MSR asset and more closely resembles permanent capital, yet at a much lower cost, making it highly accretive. Existing MSR is eligible collateral and may provide the opportunity for owners to distribute capital from advances against such MSR at initial closing of the facility. Exact terms are customized for each borrower by MorVest, utilizing its proprietary models in conjunction with business projections provided by the companies. In addition to its advisor role, MorVest will purchase a participation in each MSR loan made by Customers Bank. The principals of MorVest have previously purchased, financed, hedged and sold $billions in MSR as principals, making $millions for their investment partners.
MorVest Capital, LLC is a boutique investment firm primarily focused on providing capital and strategic solutions to the mortgage banking and housing industry.
© 2013. MorVest Capital.