Monthly Archives: April 2018
Tuesday, April 3, 2018
By Paul Muolo
The first quarter of 2018 came to a close Saturday, with many conventional lenders happy to see it end, but that doesn’t mean the origination downturn – courtesy of higher rates – was a horror show by any means.
Certain shops posted modest production declines compared to the fourth quarter of 2017 and several increased lending compared to 1Q17, according to interviews conducted by Inside Mortgage Trends.
But perhaps the biggest shot in the arm came from an increase in the asset value of servicing rights held on the balance sheets of nonbanks and depositories alike.
“Origination margins are getting compressed,” said David Fleig, CEO and president of MorVest Capital, Houston, “but the firms that are really shining right now are the ones that built up and kept servicing instead of selling it.” For more details, see the new edition of Inside Mortgage Trends, now available online.
Wednesday, March 28, 2018
By Paul Muolo
Servicing-released premiums on conventional whole loans sold into the secondary market are the best they’ve been in at least five years – and perhaps longer – thanks to higher interest rates, according to interviews conducted this week by IMFnews.
“We’ve seen a consistent increase in MSR values since early in the first quarter as a result of greater degrees of certainty for higher interest rates,” said Tom Piercy, managing director of Incenter Mortgage Advisors, Denver.
“While the rate curve is not anticipated to be steep, confidence is high that rates will trend higher, hence less volatility around MSR values,” he added. “Combine this with lower production volume and we are seeing SRPs from aggregators increase.”
David Fleig, CEO of MorVest Capital, Houston, called current SRP values “eye-popping.” He noted: “We’ve seeing some very aggressive bids from the big players.” For more information, see the upcoming edition of Inside Mortgage Trends, available online Friday.
Tuesday, Feb 13, 2018
By Paul Muolo
Thanks to rising interest rates in the second half of 2017, sales of mortgage servicing rights boomed last year and, the way things stand today, 2018 could bring more of the same.
“Conditions are great right now,” said Mark Garland, executive vice president of MountainView Servicing Solutions, Denver. “We’re at the point where the rate situation has created certainty in the market.”
Garland and other dealmakers point to not only higher rates but lower anticipated loan production and MSR values that are firming up.
“We discouraged our clients from selling in the fourth quarter and now it’s paying off,” said David Fleig, president of MorVest Capital, Houston. “Companies that created servicing rights and retained the product are going to enjoy this market very much.”
At yearend, the yield on the benchmark 10-year Treasury was at 2.47. Today, it’s almost 40 basis points higher. In August, the reading was much lower at 2.06 percent. For the full story, see Inside Mortgage Finance, now available online.
© 2013. MorVest Capital.