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Aggressive bidding in MSR market inspires new Fannie portfolio sale

MountainView brings $152M of Fannie servicing to market

The market for mortgage servicing rights remains heated, with MountainView Servicing Group noting it was selected to bring a Fannie Mae mortgage servicing rights portfolio valued at $152 million in unpaid principal balance to market.

Written bids for the portfolio are due on Wednesday, Nov. 20, at 2 pm.

The portfolio features a series of low-risk features, including 100% fixed-rate mortgages and first-lien products with a weighted average interest rate of 3.66%, with the 30-year product featuring a 3.90% interest rate.

The pool contains no delinquent loans and an average loan size of $286,682. The mortgages are concentrated in California, with the state making up 40.8% of the portfolio, and New Jersey – which makes up 33.2%. Florida properties represent another 14%.

The sale comes at a time when servicing rights are gaining traction on the auction block as firms rush to gain financial traction as they lose volume in originations.

"Several of our clients are taking advantage of the aggressively bid mortgage servicing rights market," said Matt Maurer, managing director at MountainView Servicing Group and the lead advisor on the sale. "And with margins compressed and origination volumes down, selling servicing at a gain holds a lot of appeal."

The trend of relying on servicing or MSR sales to offset falling originations is not new. Recently, PennyMac Financial Services (PFSI) reported that its earnings missed target after experiencing lower gains on sale margins and falling mortgage originations.

As a result, the company switched its focus to servicing.

Even mega servicer Nationstar Mortgage Holdings (NSM) sold its wholesale lending channel and key retail distribution assets to Stonegate Mortgage (SGM), announcing its intent to focus on growing its servicing operations this past month.

The company retained direct-to-consumer lending, but noted a significant reduction in lending staff and facilities, which will be transferred to Stonegate.

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