As interest rates remain volatile, they force lenders to find creative, alternative paths to revenue. One of those areas of opportunity is the mortgage servicing rights (MSR) market.
Last year, a combination of factors—including steadily increasing interest rates, rising home values, and scarce inventory—reduced the amount of Americans relocating and extended the life of most mortgage loans. In a rising rate environment, homeowners have been less likely to refinance or relocate, steadily driving up the value of MSR assets. In turn, MSR offerings have flooded the market, with overall values totaling in the tens of billions.
Opportunity in the MSR market
These dynamics have created major MSR-related deals. Many lenders seeking sources of cash inflow or finding it very expensive to hold MSRs are looking to offload these assets in an expedited manner. Here, it becomes vital for lenders to partner with reputable TPR firms specializing in MSRs—which can be challenging since many TPR firms don’t cater specifically to MSR assets or only undertake them at expensive per-loan costs.
The current rising rate environment makes 2023 an ideal time to reconsider how you’re managing MSR assets. With the need for cash flow only likely to persist, it’s important to mitigate MSR risk and to take advantage of available gains. To best profit from the MSR marketplace, lenders should enlist the services of an experienced partner.
Partner for MSR success
Unlike most TPR firms, Maxwell offers due diligence on mortgage servicing rights at a reasonable fee per loan. Since our team is highly experienced in this type of asset, you can rest assured we’ll identify any issues before placing the MSR pool to market, saving you time and protecting your reputation. Plus, technology-powered features, such as integration with your LOS, can speed up the process, creating a seamless transaction backed by dependable, transparent service.
On top of mortgage servicing rights, Maxwell Diligence provides many other asset-class reviews as well as quality control solutions such as pre-close eligibility reviews on non-QM, jumbo, and a variety of other traditional and non-conforming loan types. Maxwell Diligence uses 100% onshore talent, allowing you to access our expert team without carrying expensive headcount. Not only will you save on cost per loan, but you’ll reduce overhead spend.
These benefits can help boost profitability at a time when shrinking demand and other challenging market forces have reduced opportunity in the market. By taking full advantage of areas that continue to thrive, such as the MSR marketplace, you’ll best position yourself to weather today’s rising-rate environment.