"As an example, Letica said Two Harbors sold $30 billion in unpaid principal balance (UPB) during the last quarter to a new client on a retained basis a transaction that also established a subservicing relationship for the company. Overall, the MSR bulk market volumes have slowed sharply since the high-velocity trading environment of 2022 and 2023. Letica estimates that while roughly $700 billion in MSRs changed hands during those peak years, today's market is running at about 35% of that pace."
"MCT's September MSR Market Monthly Update shows that as mortgage rates began declining in early September, bulk MSR offerings surged past $50 billion and could exceed $100 billion in October. MSR holders seek to capitalize on near-record valuations before rates fall further, with moderately seasoned portfolios with coupons below 5% continuing to trade at 5.00x5.50x servicing fee multiples, with demand and pricing expected to stay strong through the end of 2025."
"On the origination side, Preetam Purohit, head of hedging and analytics at Embrace Home Loans, said the highest-quality loans are being quickly absorbed by correspondent lenders. Then remains your lower FICO, that's kind of what we are retaining. Ultimately, that's what's going to go into the bulk market, so what we'll see is a much lower quality supply coming in, directly through the bulk market,"
Two Harbors sold $30 billion in unpaid principal balance (UPB) last quarter on a retained basis and established a subservicing relationship. MSR bulk market volumes have slowed sharply from the high-velocity trading of 2022–2023. Roughly $700 billion in MSRs changed hands during peak years; the current market is running at about 35% of that pace. As mortgage rates began declining in early September, bulk MSR offerings surged past $50 billion and could exceed $100 billion in October. Holders aim to capture near‑record valuations before further rate declines. Moderately seasoned portfolios with coupons below 5% trade at 5.00x–5.50x multiples, with demand expected through 2025. Higher‑quality loans are being absorbed by correspondent lenders, leaving lower‑FICO supply to flow into the bulk market. Larger originators are leaning toward retaining servicing amid high prepayment speeds.
Read at www.housingwire.com
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