Mortgage

A $ 6.three billion portfolio deal is testing the urge for food of the mass MSR market

The market for mortgage service rights is growing after developments related to corona viruses practically frozen the market earlier this year.

Incenter Mortgage Advisors accepts bids for an offer of nearly $ 6.3 billion on behalf of an undisclosed seller. Bids must be sent via email on Tuesday by 12 noon mountain time.

The transaction is at least the second major, experienced MSR deal since government-sponsored companies suspended bulk purchases of credit over six months in early May.

The weighted average age of GSE loans in the MSR portfolio is almost 11 months. The package contains slightly more Fannie Mae loans than Freddie Mac loans, and the weighted average interest rate is almost 3.78%.

All mortgages were current as of June 30, but just over 1% or 310 of the 27,617 loans in the portfolio had outstanding requests for reimbursement at that time.

The weighted average FICO value for the package is almost 763 and the weighted average credit to value ratio is almost 74%.

MSRs have a concentration of nearly 40% in Texas based on the current credit balance and a concentration of more than 42% in the State of Lone Star based on the number of loans.

The seller wants the MSRs to be traded no later than August 31.

This date is the current deadline for some of GSE's temporary coronavirus relief efforts, including a foreclosure moratorium.

Additional GSE relief efforts due to expire on August 31 include a temporary exemption from the regulations that typically prevent mortgage companies from granting new loans to Fannie and Freddie when borrowers request leniency after they close. In this case, new loans can currently be granted to the GSEs if mortgage banks are willing to sell them at a substantial discount.

The measure that allows GSEs to buy these loans in advance expired on July 31, but was last minute renewed on Friday by the regulator and conservator of GSEs, the Federal Housing Finance Agency.

While this measure does not directly impact the bulk sales of seasoned loans, it can have some impact on the refinancing options available to older mortgage borrowers.

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