A wave of mortgage servicing rights sales is likely to emerge due to the impact of the shift in rates and margin compression at lenders, according to Jay Bray, chairman and CEO of Mr. Cooper.
"If you go back two years ago or a year ago, all of the originators could keep their servicing, margins were very large and provided them with a lot of flexibility," he noted at a Housing Finance Strategies conference on Tuesday. "Today, at 6% coupons, they're not going to be able to keep the servicing, they are going to have to sell the servicing."
And Mr. Cooper plans to be a buyer in this market.
"I think you'll see a lot of MSRs enter into the marketplace," Bray said "We'll certainly participate in buying our fair share of those."
Mr. Cooper also plans to keep putting money into its operations, he added.
"Buy a lot of MSRs, we will do that, but I think it's really important to be intentional about investing in your platform and your team members as well," he said.
Examples of this include continued investment in automation in conjunction with
Closing technologies the two companies have been continuing to further develop include Pyro, a patented artificial intelligence-driven technology that digitizes the data from documents.
"We think it's going to be really powerful for not only us, but others as well," Bray said.
Mr. Cooper also is continuing to build out RightPath, the unit it created after
"As we think about going into this cycle, it actually gives us additional capacity to handle delinquent borrowers," Bray said. "It gives us the ability to be a solution to other servicers that really do not want to be in the default business."
"They're going to be higher, we're going to have challenges, but I think we'll get through this as an industry for sure," he said.
