VA Specialist Keeps MSRs
Mortgage Investors Corp. here, the largest VA refi specialist in the nation, has decided to keep the servicing rights it originates instead of selling its production servicing-released.
MIC, though, will not be doing the servicing chores itself. The privately-held mortgage banker has hired GMAC Mortgage, Horsham, Pa., as its subservicer.
"We will own the servicing rights, but GMAC will be the contractor," said MIC chief executive Bill Edwards.
In other words, when consumers sign onto MIC's website to check their mortgage account, they will see the MIC name, but GMAC will be doing all the underlying work.
"It's a total private label arrangement," said Mr. Edwards. The past two years, GMAC has made a big push into the subservicing arena.
MIC hopes to produce upwards of $6 billion in residential loans this year, almost all of it Veterans Administration refinancings.
It anticipates that its servicing portfolio will total at least $3 billion by year-end.
Mr. Edwards said the company decided to retain servicing rights because the performance on its production over the past 10 years has been terrific.
He estimates that over the past decade, MIC has funded at least $15 billion in loans and the foreclosure rate has been less than 1%. "That's phenomenal," said the CEO. "We think keeping the servicing rights is a good investment for us."
In tandem with the servicing effort, the company has also started securitizing some of its production - through GMAC. (Its first securitization was a small, $10 million deal.)
Like many mortgage bankers, MIC is quite busy these days. Jeff Crilley, chief operating officer for the company, estimates that MIC funded about 14,000 loans in the fourth quarter alone.
Its production for the year was about $3.2 billion, slightly less than the record $3.8 billion it produced in 1998, another great refi year. The lender employs about 2,300.
Messrs. Edwards and Crilley are quite bullish on 2003, based on just the first few months. Asked what MIC will do once the refi boom ends, Mr. Crilley said confidently: "It won't end for us."
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