Few base their company or family’s savings on the inherent risk in a prediction. But… On a big scale, and we’ve been hearing forecasts of a recession for a year now, JPMorgan Chase’s economists opine that the economy will slip into a mild recession in 2023 as a result of the Federal Reserve’s monetary tightening. Of course, recessions usually mean lower rates (one of the topics in today’s Rich and Rob show with MGIC). “We also expect slowing aggregate demand eventually leading to labor market weakness that builds on itself, and we anticipate that we could lose over a million jobs by the middle of ’24.” Smaller mortgage banks may not be able to wait it out. STRATMOR’s M&A practice is “en fuego” with large and small deals. Mortgage servicing rights continue to hit the open market in varying sizes and shapes. Informally chatting with a couple servicing specialists indicates that the smaller pools are mostly from sellers that thought the market would turn around and are giving in to higher rates whereas the bigger pools of servicing are due to more aggressive agency putbacks. Lenders must have cash to buy back loans if their defense doesn’t work, and the most valuable asset many companies have is their servicing portfolio. (Today’s podcast is available here and this week’s is sponsored by MCT Investor Services, which helps investors scale their seller base, automate the bid process, source whole loan and flow co-issue production, automate AOTs, and analyze performance all in a cost-effective manner.)
Source: Mortgage News Daily