Mortgage-servicing rights (MSRs) have become increasingly difficult for small, struggling firms to divest. This is due to a rise in demands for mortgage buybacks from Fannie Mae and Freddie Mac. These government-sponsored enterprises are using their market clout to further leverage their position in the mortgage industry at the expense of smaller lenders.
Smaller firms are especially impacted by the buyback pressure, as they are unable to compete with the terms that their larger counterpart firms are offered. Benefits for larger firms include lower costs and more favorable attitude resolutions when dealing with Fannie and Freddie, while smaller firms do not have this luxury.
Most important points:
• Difficult for small, struggling mortgage companies to divest mortgage-servicing rights (MSRs)
• Elevated buyback pressure from Fannie Mae and Freddie Mac
• Government-sponsored enterprises are using their market clout to leverage mortgage industry at expense of smaller firms
• Smaller firms unable to compete with terms offered to larger firms
• Benefits for larger firms such as lower costs when dealing with Fannie and Freddie
You can read this full article at: https://www.housingwire.com/articles/gse-repurchase-risk-is-rippling-through-the-msr-market/(subscription required)
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