Why Does United Wholesale Mortgage Sell Low Coupon MSRs?

Sep 30
7 min read

October 1, 2025 | The big question in the residential mortgage market: What is going to happen to FHA/VA/USDA loans in the event of a government shutdown? Answer pretty much nothing. Nada. FHA will stop processing certain new loans, including single-family mortgages and new applications for housing projects. This creates major delays for new housing developments and financing deals. HUD posted this unusual message on the website (h/t Scotsman Guide).

The second big question facing the mortgage industry concerns the $900 million bond deal by CrossCountry Mortgage (CCM), which claims to be the largest retail mortgage shop in the US. Most of the big players in residential mortgage shot retail lending in the head years ago, but hope springs eternal. Mortgages is, after all, still a people business. Yet the fact of CCM's retail focus did not discourage bond market investors.

The CrossCountry raise went well, with CCM pricing an "upsized" offering of $900 million in senior unsecured notes due 2030. The offering was increased from an initial planned size of $600 million due to strong market interest and carried a 6.5% coupon for the "B+" rated issuer (Fitch). That's inside of +300bp over the yield on the five year Treasury note or an implied "BB" spread. Nice job CCM.

In fact, most of the major mortgage issuers have been raising new capital in the bond market, leveraging the sellers market in credit that has propelled debt and equity issuance this year to record levels. Some issuers use the proceeds to finance mortgage servicing rights (MSRs), while others may shop for acquisitions. But when it comes to M&A, a good valuation for most mortgage firms today is the fair value of the MSR plus a warm handshake.

For the 12-month period ending in August 2025, U.S. mortgage lenders and government-sponsored entities issued $1.1924 trillion in mortgage-backed securities (MBS). This represents a 21.7% increase in volume over the previous year. For many mortgage firms, 2025 will be significantly better than last year in terms of volumes and a toss-up in terms of profits, depending on who is driving the bus. Below we talk about the members of the mortgage issuer group as we head into an eventual falling interest rate cycle.