The great MSR sell-off continues

MountainView Servicing markets $2.1B in Fannie, Ginnie MSRs

Advisory firm MountainView Servicing Group went public Wednesday 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.

This is not the first sale of agency-linked MSRs that MountainView has handled as an advisor, and it’s unlikely to be the last, given the current requirements for holding mortgage servicing rights that now exist under Basel III.

As early as October of last year, the Mortgage Bankers Association warned that how MSRs are defined when calculating a bank’s Tier-1 capital ratio under Basel III could spark a mass sell-off of MSRs.

As defined by Basel III, the value of mortgage servicing rights can only be used to account for up to 10% of common equity when determining a bank's Tier-1 capital requirements.   

The MBA's prediction turned out to be true. MSR sell-offs continue en masse today.

In late June, MountainView Servicing managed the sale of $1.2 billion MSRs tied to GSE and Ginnie Mae loans. Another multi-billion dollar MSR sale marketed by MountainView came right before that.

The latest deal marketed by MountainView includes a Fannie Mae portfolio, with 99% of the product classified as fixed-rate, first-liens. About $431 million is linked to HARP servicing. The portfolio maintains a weighted average FICO score of 733 and an original LTV of 107%. A majority of the homes tied to the debt are located in the states of Florida, New Jersey, Massachusetts and Rhode Island. The portfolio features an average loan size of $212,333.

The second offering announced this week is a $1.5 billion portfolio, with $1 billion in Ginnie Mae MSRs and $500 million in Fannie Mae MSRs. The deal features mostly fixed-rate, first liens. It also boasts an average FICO score of 708, an LTV of 90% and $101 million in HARP servicing. The portfolio is mostly tied to properties in the states of Texas, Ohio, Colorado and Oklahoma.

The average loan size hovers around $160,000.

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