MIAC: Servicing Prices Up Slightly after Dismal '02

With rates at historic lows and few buyers expressing an interest in mortgage servicing rights, you might be surprised to learn that MSR values actually increased in January.

Mortgage Industry Advisory Co., which tracks an index of hypothetical MSR values, found that the floor fell out late last year, with MSR prices declining 35% in December of last year. In January, however, MSR prices for 30-year mortgages increased 9.6% to regain some of the lost ground. The big decline in December MSR values helps to illustrate just how sensitive to rate movements MSRs are.

MIAC's conventional 30-year index is weighted by outstanding unpaid principal balance of the entire mortgage market.

Particular types of loans have changed to a greater or lesser extent, MIAC said. Falling rates had a dramatic impact on MSR prices last year. 30-year, agency MSRs fell 60% between mid-May of 2002 and early February of this year.

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