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.

Ginnie Mae would rather have issuers raise the NPV of the MSR in cash today than take the price risk of holding the whole MSR through time.

We look for lower prices for legacy MBS and MSRs as new allocations are used up and P&Ls sink deeper into the red...

magine if the Fed started margin calling the big banks in response to the April market selloff rather than supporting the system!