The Institutional Risk Analyst

The Citi decision to exit mortgage servicing perhaps made sense in 2017, but today not so much.

Axos continues to rebound after the bear raid by Hindenburg Research. AX ranked 18th in the WGA Bank Top Index in Q3 2024 vs 98th for SOFI

Ginnie Mae would rather have issuers raise the NPV of the MSR in cash today than take the price risk of holding the whole MSR through time.

The survivors in mortgage finance optimize operations around purchasing loans from brokers/ correspondents, and direct to consumer (DTC)

If the run-of-the-mill Republic First interest rate mark is 13.3% of assets that is not just wiping out one bank’s 8% capital but also FDIC

McCargo's actions and the fact that the case has not been dismissed in its entirety is very unhelpful given current market conditions.

If we are marking balance sheet assets to actual market in the age of deflation, what of the heavily modeled world of servicing assets?

Regulatory skepticism about mortgage assets could effect financing rates for lenders, which means higher mortgage rates for consumers.

We look for modest rate cuts in 2025, followed by an equally modest boom in mortgage lending

We suspect that the IMBs will be sellers of conventional assets to defend their Ginnie Mae MSRs. Banks may be buyers of conventional assets

But nothing lasts forever in mortgage land or in financials. Stay tuned and pay attention to LT rates and spreads...

The entire mortgage industry will have a single point of failure with the ICE/BKI combination

Many of the startups, investment flows and SPAC transactions that proliferated in 2020-2021 are likely to be casualties in the next several

Collateralized lending in the US was essentially impossible outside of banks from 1925 through the mid-1970s...

We think the chart below from FRED is worth any amount of words on the impact of QE on equity market valuations.

The SEC has finally decided to do the unthinkable, namely repudiate the admittedly fanciful idea of liquidity on demand at par.

The Fed’s chief concern is keeping the Treasury debt market open and functional. Liquidity includes cash and risk-free collateral...