The Institutional Risk Analyst

PFSI trades on a trailing P/E of 14x vs ~ 8x for RITM. PFSI trades around 1.6x book vs 0.9x for RITM. Case closed? We have long believed that RITM should spin off its manager to create a comp for PFSI and then externally manage the RITM REIT. Like PFSI, in this scenario the new RITM manager would need to retain the Ginnie Mae MSRs.

The majority of the actual cash profit generated from residential lending is found in the mortgage servicing rights (MSRs).

If we are marking balance sheet assets to actual market in the age of deflation, what of the heavily modeled world of servicing assets?

Since 2008, dollar swap spreads have traded below Treasury yields, suggesting a persistent demand for dollars coming from offshore.

The good news is that NRZ is growing and making strides in terms of asset creation and, especially, asset retention.

There is no actual disclosure from PSFI as to exactly how much of the firm’s default advances are being financed with bondholder funds