Multiple sellers affiliated with depositories put mortgage-servicing rights portfolios up for bid this week, including one large $4.85 billion bulk offering of
In addition to that offering from Incenter Mortgage Advisors, smaller agency and Ginnie Mae deals are on the market. These include a $2.1 billion Fannie Mae and Freddie Mac bulk offering dominated by third-party originations from an unidentified bank-affiliated lender, according to IMA. In addition, the Mortgage Industry Advisory Corp. has put a $1.86 billion Ginnie Mae deal from an unnamed bank affiliate with an Indiana concentration up for bid.
These transactions, combined with the news that Wells Fargo will be
But the sales don't necessarily reflect a broader trend of banks selling off their MSRs, said Mike Carnes, managing director of Mortgage Industry Advisory Corp.'s MSR Valuation Group.
"I work with other banks that buy agency MSRs on a regular basis and they still love them," said Carnes. "There is concern that Wells in particular would take out a lot of large buyers who would fill up on its offerings, but if they're fortunate enough to have one buyer swoop in and take everything that they got, then then the impact of the market from them is probably nothing."
Large companies like
Wells' plans for its MSR sales were unspecified as of Wednesday, so existing deal flow was a more reliable indication of market conditions and opportunities at deadline.
In that context, the jumbo offering in particular could be an opportunity for investors given such deals are rarer than Ginnie or government-sponsored enterprise portfolios, said Tom Piercy, president of national enterprise development at Incenter, in an email. Banks usually prefer to hang on to their jumbo customers.
"The cash flows are much higher than a typical GSE or Ginnie Mae deal yet it trades slightly below a GSE offering," said Piercy, who also is a managing director at Incenter Mortgage Advisors.
Weighted averages for the jumbo portfolio's loan age and interest rate are 30.2 months and 3.23%, respectively. It has a 2.41% delinquency rate and 0.52% of the loans are affected by either foreclosures or bankruptcies. The average loan size is $654,844.
The Fannie/Freddie portfolio's loan age and interest rate are 30.5 months and 3.27% on a weighted average basis. Its loan performance track record appears to be spotless. The average loan size is $217,054. The offering comes from a lender "who has developed a large community bank network to generate these high quality loans," Piercy said.
Weighted averages for the Ginnie portfolio's loan age, interest rate and FICO are 19 months, 3.79% and 663. It has an 11.82% delinquency rate.
The jumbo offering has a written bid deadline of Jan. 24 at 2 p.m. Mountain Time. The deadline for the Fannie/Freddie portfolio is Jan. 19 at 2 p.m. Mountain time. The Ginnie offering's deadline is at 5 p.m. Eastern on Jan. 19.
