MCT's Update for the Current MSR Market 5/3/2023

By Danielle Dvorchak posted 05-03-2023 18:18


This blog contains the MCT MSR team's knowledge and insight into all MSR news right now. Read on to learn about the MSR market in this current climate. 

Mortgage rates and most indices remained volatile during the month of March. However, mortgage rates managed to close the month at about the same level as of 3/31, while float income rates increased by about 14 bps by 4/30.  Mortgage production remained weak during April, but there were signs of a slight increase in production compared to March levels due to mortgage rates declining early in April.

Market values for existing MSR portfolios also remained relatively flat during April. Bulk MSR market values continue to show some resiliency including a moderate increase during April and are very close to current portfolios’ Fair Values. This was a significant shift after generally sustained weakness in the MSR bulk market during Q4, 2022. Current market values are now within approximately 5 bps of Fair Values.
As of April 30, 2023, the current 30 Year base mortgage rate is 6.492%, which represents about a two (2) bp increase from the March 31st mark. We anticipate that existing portfolio fair values will remain either unchanged or slightly higher from their 3/31/2023 marks in the range of about 1-3 basis points, depending on underlying portfolio characteristics.
For portfolios that have a mix of Conventional and Government loans, we anticipate Fair Value changes as follows:

  • Conventional loans between -1 to +3 bps change from March 31, 2023 marks.
  • Government loans between -1 to +4 bps change from March 31, 2023 marks.
    • GNMA loans are experiencing a continuous uptick in delinquency rates which generally began in Q2, 2022.  Due to the increase in delinquencies, we are currently monitoring and are more cautious with our GNMA fair value estimates at this time.

Have any questions regarding this update? Contact us today and a member of our team will be in touch with you or feel free to engage in conversation on this post with us! 

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