Tuesday, December 27, 2022
Servicing values continue to rise. This is due to the increasing value of last year's historically low coupon originations. Current coupon MSR values do not change much as their prepay propensity is consistently fairly low. It is noteworthy, however, that as current coupons rise, the risk of future payoffs (as we go through an interest cycle) rises, as does the market's yield requirements.
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