5 Ways Mortgage Companies Can Make the Most of Their MSRs


Mortgage Service Rights Research Tools

Yuri Kibalnik – stock.adobe.com

With rates rising and originations falling, lenders have once again focused on mortgage service fees as a way to keep their income high. In some cases, companies have started to gain more pre-tax income from maintenance than the slowdown in their loan production channels.

MSRs have benefits in addition to fee income – they can be sold for cash or mined for origination leads at a time when this activity is slow. But only if lenders are able to manage them properly in conjunction with their lending and hedging efforts, with the latter responding to MSR rate risks.
For banks and other institutions that offer additional financial products, they can be used to cross-sell. MSRs can also obtain lines of credit for business expenses or other needs.

To make the most of all these opportunities, it helps to know some of the nuances that go into the economics of mortgage servicing fees and their valuations, and how to manage them effectively with technology or through working collaboratively with subcontractors.

What follows are tips on five ways lenders who retain their mortgage servicing rights can get the most out of them from four experts familiar with the nuances involved in the various aspects of this segment.

This advice includes information on current conditions in the financing, services and technology markets. Also discussed below are existing and proposed rules for remittances and escrows that can affect value, as well as some creative recovery and marketing strategies that can be executed using mortgage servicing rights.

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