Friday, September 30, 2022
Servicing values seem to have plateaued and entered into "wobble" mode. While rising rates help older, lower coupon mortgage servicing rights, their impact on new originations is minimal. We now have mid-6's coupons, with some uncertainty whether they will go up or down. The higher rates (more room to fall) and the uncertainty of future direction is adding to the MSR price volatility. This uncertainty has also contributed to the market demanding a higher return on this investment.
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