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One day, we may all look back at the 2020-2021 housing market
and marvel at the confluence of factors that sparked the longest and
most active refinance market we may ever see. But like all good things,
that party has come to an end—and an abrupt one at that.
With rising rates, the spotlight has now
shifted to other opportunities, and one of the
brightest may be the market for mortgage
servicing rights (MSR). It may not grab the
headlines like the origination market did, but
the increase in MSR values is something for
servicers to feel good about. However, in the
not-too-distant future, this party may also end
abruptly—unless organizations start thinking
strategically about how to best manage
these assets in an increasingly complex and
challenging environment.
HOW QUICKLY THINGS CHANGED
Many of us look at the housing market
fundamentals and create a crystal ball in our
minds about where we think the market will go
and the reasons why. Yet there was a great deal
of surprise in how quickly the current market
shift occurred and how different everything
looks from just six months ago. In fact, over the
past five months, interest rates rose faster than
any period in the past four decades.
Surprising or not, for the most part,
companies in the MSR space reacted to the
Feature By: Allen Price
THE MSR MARKET
IS SOARING, BUT
CHALLENGES AWAIT
Buyers in the MSR market are finding great deals at the time, but these rewards may come with
great risk.
