More Fuel for a Red-Hot MSR Market: Long-Term Financing for Selected Buyers
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.
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