Since last month’s issue, we added a “Research Insights” series to our Monthly Residential MSR Update. These Insights are designed to be both short and topical. Your feedback is essential to accomplishing these twin objectives. We welcome comments on existing articles as well as suggestions for future ones. The additional content will follow the MSR… Read more »
MIAC Publications
Residential MSR Market Update and Research Insights – October 2019
Beginning with this issue, we are adding a “Research Insights” series to our Monthly Residential MSR Update. These Insights are designed to be both short and topical. Your feedback is essential to accomplishing these twin objectives. We welcome comments on existing articles as well as suggestions for future ones. The additional content will follow the… Read more »
Residential MSR Market Update – September 2019
Month-over-Month From end-of-month August to end-of-month September, the MIAC Generic Servicing Assets, (GSAs™) Conv_30 Index increased by 3.53% and the GNII_FHA_30 index increased by 3.15%. In larger GSA cohorts, which are actively traded in the MSR market, the Conv30_3.5_2016 cohort increased by 3.70% and the GNII_FHA30_3.5_2016 cohort increased by 3.23%. During the month of September,… Read more »
Residential MSR Market Update – August 2019
Month-over-Month From end-of-month July to end-of-month August, the MIAC Generic Servicing Assets, (GSAs™) Conv_30 Index decreased by 7.45% and the GNII_FHA_30 index decreased by 12.96%. In larger GSA cohorts, which are actively traded in the MSR market, the Conv30_3.5_2016 cohort decreased by 8.03% and the GNII_FHA30_3.5_2016 cohort decreased by 17.06%. During the month of August,… Read more »
CECL – Raising the Standards of Success
Overview of the Rules CECL overhauls the current impairment models for loans, leases and debt securities, and also impacts commitments. It removes the “probable” threshold under the “incurred loss model” for recognizing credit losses. Firms will be required to report the current estimate of lifetime loan losses, incorporated into the Allowance for Loan and Lease… Read more »
Selling Seasoned Residential Whole Loans to the GSEs or Ginnie Mae
Who are the GSEs and Ginnie Mae? Fannie Mae, the Federal National Mortgage Association (FNMA) and Freddie Mac, the Federal Home Loan Mortgage Corporation (FHLMC) are the established secondary market lenders responsible for the liquidity of the majority of conventional, non-Government, conforming residential whole loans that are originated today and for the past number of… Read more »
Mortgage Benchmark Prices and Yields in a Post-LIBOR World
Executive Summary For purposes of lowering mortgagor borrowing costs, building a stronger banking system through more efficient hedging of mortgage risk and encouraging additional capital to enter the mortgage sector, we believe there is ample reason to include a mortgage current coupon yield index as one of the alternative indices to LIBOR Now that protective… Read more »
Choosing a Hedge Vendor and Preparing for Hedging
Macro Considerations At a high level, considerations for how to choose 1) a pipeline hedge vendor and 2) the type of engagement with a hedge advisor, are dependent on characteristics of the lending institution, including: Type of institution: i.e. independent mortgage banker, depository Evolutionary stage of the firm: BE to Mandatory conversion? Becoming an agency… Read more »
What is a Mortgage Servicing Right (MSR)?
By definition a Mortgage Servicing Right, herein referred to as MSR(s), is a contractual agreement where the right, or rights, to service an existing mortgage are sold by the original lender to another party who, for a fee, performs the various functions required to service mortgages. As a servicer, firms are responsible for collecting… Read more »
CECL – Current Expected Credit Loss: A CORE Competency?
Current Expected Credit Loss (“CECL”, ASC 825-15) is the Financial Accounting Standards Board’s (FASB) new model for calculation of loan loss reserves, which requires consideration of multiple scenarios looking out over the lifetime of the instrument. These standards replace those now in use for preparing Allowance for Loan & Lease Losses, (“ALLL”), purchased credit-deteriorated assets,… Read more »