By now you’ve read the stories on the National Mortgage News website about private equity sniffing around the mortgage industry the past two years – and the chatter about some firm with $1 billion to spend. We don’t yet know the name of that fund but it’s interesting gossip nonetheless. Still, the question must be asked: is private equity money still nervous about mortgage banking? Answer: to some degree, yes. Wilbur Ross appears to have substantial PE backing and has stepped gingerly, selectively making mortgage purchases and investing in such firms as CMC. (Heck, he almost bought UGI two years back.) There have been smaller, less publicized PE deals, but nothing major. But consider this: the stock market looks tenuous right now, oil stocks may be overpriced, and Europe may crack up in the fall so maybe, just maybe, PE funds will get real about mortgage banking. We know this: MSRs and still dirt cheap.
