The Institutional Risk Analyst

So why would a firm like CrossCountry or UWMC be a buyer of higher coupon MSRs?  The short answer is that they believe their ability to retain the borrower by recapturing a prepayment will offset the obvious negative of high prepayments that comes with a lower interest rate environment.  These firms, it seems, would rather try to recapture prepayments on higher rate MSRs than own lower coupons and benefit from the stable cash flow from the servicing.

While there are a great number of people inside the Fed who ponder the appropriate level of reserves in the system, they don't really know

It seems obvious that the reported book value metrics coming from many commercial banks, REITs and mortgage banks are a tad inflated...

With the Fed doubling down on rate increases, the pressure on all manner of nonbank finance companies and fintech platforms is growing.