Who said the MSR market was frozen?
Another billion-dollar bulk portfolio available for sale
Back in April, Ocwen Financial (OCN) Executive Chairman William Erbey said that the entire mortgage servicing rights market was frozen by the New York Department Financial Service, after the DFS put a $2.7 billion MSR deal between Ocwen and Wells Fargo (WFC) on an indefinite hold.
“Until we resolve – this relates to Ocwen – until we resolve New York State we’re not acquiring any new (MSR) portfolios at all. As a matter of fact the entire market – nothing is being put out for bid right now,” Erbey said at the time. “The whole market has stopped until that gets resolved.”
While that may be true from his perspective, indeed New York is reportedly deepening its investigation, recent activity shows a fair amount of activity elsewhere in the space.
In fact, since Erbey made his proclamation, at least $9.2 billion in in MSRs have been brought to the market.
In May, a $3 billion Fannie Mae bulk MSR portfolio was offered by MountainView Servicing Group, which acted as the exclusive broker for the deal. In June, another $1 billion in Fannie-backed MSRs hit the market.
In July, more than $4 billion in MSRs was brought to the market in two separate deals. First, Seattle-based HomeStreet (HMST), the parent company of HomeStreet Bank, agreed to sell approximately $3 billion in MSRs to SunTrust Mortgage.
Then, an additional $1 billion in MSRs hit the market later in the month, consisting of loans backed by Fannie, Freddie Mac, and Ginnie Mae.
And earlier this month, $1.2 billion more in MSRs was brought to the market, boasting Fannie and Ginnie-backed loans.
Now, nearly $5 billion more in bulk MSRs is available for sale, according to Mountainview and Interactive Mortgage Advisors, which are each acting as the exclusive sale advisor for two new deals.
The larger of the two offerings is a $3.17 billion pool of MSRs, backed by Ginnie Mae.
“The seller is a well-known, independent mortgage banking entity with strong financials to stand behind all representations and warranties, as well as, experienced senior management to facilitate a smooth transaction in all areas,” Interactive said in an announcement.
The pool carries a weighted average note rate of 3.67% and a service fee of 29.41 basis points. The pool also carries a 12-month average escrow balance of 1.07% of the unpaid principal balance and is sub-serviced by a “nationally known company.”
Bids for the pool are due Wednesday, August 27 by 12:00 p.m. Mountain time.
The Mountainview portfolio consists of two pools of MSRs, with a $1.1 billion pool backed by Fannie and a $453 million pool backed by Ginnie.
“The portfolio is offered with full representations and warranties from the seller,” Mountainview said. “The seller will review and consider all bids. As such, bidders may bid the entire portfolio (preferred) or Part A or Part B, individually.”
According to Mountainview, the combined $1.6 billion pool carries a weighted average original FICO of 740 and a weighted average original loan-to-value ratio of 80%.
Per Mountainview’s report, 94% of the loans are fixed-rate and 100% are first-lien products. The loans also carry a weighted average interest rate of 3.92%, with an average of 4.03% on the 30-year fixed-rate mortgages.
The combined pool carries low delinquencies and an average loan size of $225,152.
The top states that make up the pool are New York (30.9%), California (12.1%), New Jersey (11.5%), and Virginia (5.6%).
According to Mountainview, the larger of the two pools, the $1.1 billion Fannie pool carries a weighted average original FICO of 757 and a weighted average original loan-to-value ratio of 74%.
Per Mountainview’s report, 91.5% of the loans are fixed-rate and 100% are first-lien products. The loans also carry a weighted average interest rate of 3.84%, with an average of 3.97% on the 30-year fixed-rate mortgages.
The pool carries an average loan size of $218,379 and the top states that make up the pool are New York (41.2%), New Jersey (15.1%), Arizona (6.6%) and Virginia (6.1%).
According to Mountainview, the smaller of the two pools, the $453 million Ginnie pool carries a weighted average original FICO of 696 and a weighted average original loan-to-value ratio of 95%.
Per Mountainview’s report, 100% of the loans are fixed-rate and are first-lien products. The loans also carry a weighted average interest rate of 4.13%.
The pool carries an average loan size of $243,958 and the top states that make up the pool are California (42.3%), Illinois (6.9%), and Massachusetts (5.7%).
Mountainview said in its briefing that that seller prefers a sale date of September 30 and a transfer date of November 1.
Bids for the offering are due Thursday, August 21 by 3:00 p.m. Eastern.