Incenter on Tuesday put $12.94 billion in mortgage servicing rights up for bid, a portfolio that’s at the higher end of a large range of deals in a hot market.
Until recently, MSR deals typically averaged in the billions of dollars, but those sized at $10 billion or more have become more common as interest rates have risen and companies have sold servicing stockpiled during the pandemic.
The cash-flows from borrower payments in the current deal on offer come from loans with no delinquencies, foreclosures or bankruptcies, and they are backed by government-sponsored enterprises Fannie Mae and Freddie Mac. Loan terms range from 15 to 40 years. The bulk of the loans are 30-year products.
The portfolio’s weighted averages are as follows: coupon, 3.59%; loan size, $225,653; FICO credit score, 779.9; and seasoning, almost three years (33.5 months). The estimated 12-month average for escrow expressed as a percentage of principal is nearly 0.91%.
The highest state concentrations are in Florida (29.4% of the mortgages by loan balance and count), Texas (20.5%/21.6%), Colorado (10.5%/9.2%), California (7.2%/5.6%), Illinois (6.3%/7.1%) and New York (5.4%/4.0%). No other state has a concentration higher than 5%.
The loans have a mix of different remittance cycles. For some, borrower payments are passed on to investors on the scheduled date, and others do so on the actual day of payment. A little over one-fourth by count are Freddie Mac’s legacy Accelerated Remittance Cycle loans.
Some loans with low down-payment programs or other affordability features are in the portfolio, as are Texas cash-out refinances. Certain loans may include financing for renovations. Some were refinanced or originated through programs accommodating loans with underwater or falling property values.
Loan .rmation must be accessed through the Mortgage Electronic Registration System and the unnamed seller Incenter is representing has been servicing the loans on Sagent’s system.
Written bids must be submitted by 2 p.m. Mountain time on May 19.