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Servicing

IMA plans $140M MSR sale

Asset class remains attractive in today's rate environment

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Interactive Mortgage Advisors (IMA) is managing the sale of $140 million in mortgage servicing rights tied to enterprise loans.

The offering is up for bid on Oct.1, and includes Fannie MaeFreddie Mac and Ginnie Mae bulk residential MSRs.

While IMA did not reveal the names of the sellers and buyers in the deals, the portfolio carries quality characteristics, such as a unique geography with a Utah concentration.

The increase in MSR market activity has picked up, driven by strong demand coming from private equity firms and real estate investment trusts. Demand is likely to remain as long as these firms are shopping for high single-digit returns in the current low-rate environment.

Recently, IMA managing director Tom Piercy noted that MSRs have been undervalued for years, but finally reached their peak in 2012.

"MSRs are a yield play for investors who have not been able to achieve these types of yields in the past," Piercy said.

He continued, "It’s attractive massive outside capital that’s now being deployed to capitalize on the yield in the market."

MSRs have been the subject of many sales in the past year as mega banks look to offload them on fears that new Basel III requirements will make the assets less attractive. Those banks are easily finding buyers.

One of the largest U.S. lenders, Wells Fargo (WFC) is offloading mortgage-servicing rights, announcing a new sale involving $41 billion in loans.

The bank is reportedly making this move as it focuses on shrinking its mortgage business, while adapting to new Basel III rules governing how banks can treat MSRs when calculating Tier-1 capital ratios.

Advisory firm MountainView Servicing Group went public this week to market two mortgage servicing rights portfolios valued at $2.1 billion.

The transactions include a $635 million offering for a Fannie Mae A/A portfolio, and a second $1.5 billion portfolio, comprised of $1 billion in Ginnie Mae MSRs and $500 million in Fannie Mae MSRs.

 

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