Is the 'flow' servicing market poised for a revival? Well, not exactly, but there are signs of life in the sector, where an originator pledges to sell mortgage servicing rights to a buyer on a regular basis.
As reported last week, The Prestwick Mortgage Group, Alexandria, Va., is out in the market with a flow offering valued at $720 million per year. The package is mostly Fannie Mae backed with monthly flows as high as $60 million.
George Christo, an EVP for Prestwick, confirmed that flow deals are few and far between these days -- but occasionally they happen. “I think the last time we saw one it was nine to 10 months ago,” he said.
Meanwhile, investment bankers and advisors that play in the space suggest that something much larger could be looming for the flow market.
With so many new nonbank entrants to the business, some believe that a structure could be set up where traditional mortgage bankers fund loans in the primary market and then sell the MSRs on a flow basis to REITs and nonbanks. (For the full story see the Monday paper edition of National Mortgage News.)
