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.

Mayor Eric Adams just dropped out of the New York City mayoral race and a silver spoon sucking Indian socialist from Uganda looks set to become the next Mayor of New York. You could never makes this up. But while a lot of political energy is focused on Zohran Kwame Mamdani's plans for rent stabilized properties, it is commercial real estate that pays the bills in New York City.

Is Michael Nierenberg, CEO of Rithm Capital (RITM), really paying a double digit cap rate for an "Irreplaceable Portfolio of Class A" properties in San Francisco and New York? What does this say about the true market value of all New York commercial properties?

Q: Do you suppose the folks inside the Trump White House, who spend much of the day watching Newsmax, understand that loan forbearance is about to end for tens of thousands of American households on October 1st?

As and when the home price correction finally arrives ~ 2028, many of the conventional loans written since 2020 are likely to be underwater vs the collateral.  The GSEs will be looking for reasons to reject loans. After all, FHFA Director Bill Pulte is in the loan insurance business.

Truth is, it’s hard to see the leadership of either RITM or UWMC combining with another entity, but the cost pressures in the industry today are driving radical change. 

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

The Q2 2023 disclosure for PACW suggests an institution that is bleeding cash and operating in extremis...

TCBI needs to keep efficiency in the 50s if they want to survive the coming drought in mortgage lending.

When interest rates eventually fall those late vintage mortgage loans with 6% coupons will evaporate like spring snow in the sunshine

Are nonbank mortgage firms a risk to Ginnie Mae? Or is it really the other way around?

GS is a securities dealer first and foremost and has no comparative advantage as a bank.

We suspect that the IMBs will be sellers of conventional assets to defend their Ginnie Mae MSRs. Banks may be buyers of conventional assets

Despite the outlook for the industry, COOP continues to be one of the better performing names in our mortgage surveillance group.