Key facts
- Conventional, pristine mortgage servicing rights were seeing 7x multiples amid high demand, a level not reached in more than two decades, HousingWire reported.
- Rate CEO Victor Ciardelli said the lender had retained all of its servicing rights for 12 months, exceeding $50 billion.
- Rocket Companies sold $23 billion of unpaid principal balance in the third quarter for $379 million in cash proceeds, retaining subservicing on nearly 70% of the rights sold.
- Pennymac agreed to sell $29 billion in unpaid principal balance of low-coupon conventional servicing rights, with $490 million in proceeds expected to pay down debt.
- United Wholesale Mortgage sold about $60 billion of servicing rights to JPMorgan Chase at a roughly 6x multiple, sources told HousingWire; the companies declined to comment.
- Larry Goldstone of BSI Financial Services said high-six multiples could look inexpensive and reach 7x to 8x if Basel III changes bring banks back into the market.
Conventional, pristine mortgage servicing rights were trading at 7x multiples on November 3, 2026, a level not reached in more than two decades, as lenders and investment funds competed to buy them, HousingWire reported. The rights give the holder the fee income from collecting mortgage payments, and their value rises when few borrowers refinance.
Rate has retained all of its servicing rights over the past 12 months, reaching more than $50 billion, CEO Victor Ciardelli said in an interview with HousingWire. "We really believe in retaining the MSRs, staying close to the customer," he said. John Sullivan, managing director of MSR advisory services at Milliman, said at IMN's Mortgage Servicing Rights Conference in New York on Monday that he was having more conversations with clients about retaining portfolios unless liquidity was an issue.
Banks are also showing more interest. Larry Goldstone, president of capital markets and lending at BSI Financial Services, said changes on the Basel capital front could bring more bank participation. "This is usually an inexpensive asset, and therefore an asset that people want to be able to own," he said, adding that investors could hedge the rights and still get low-double-digit or high-single-digit returns until about the past year.
Some companies sold servicing rights to raise funds or repay debt. Rocket Companies sold $23 billion of unpaid principal balance in the third quarter for $379 million in cash proceeds, retaining subservicing and recapture services on nearly 70% of the rights sold. Pennymac Financial Services agreed to sell $29 billion in unpaid principal balance of low-coupon conventional servicing rights, with $490 million in proceeds expected to pay down debt, a transaction expected to close in the fourth quarter.
United Wholesale Mortgage sold about $60 billion of servicing rights to JPMorgan Chase at a roughly 6x multiple, sources told HousingWire; the companies declined to comment. The sale is part of a plan to bring up to $80 billion of servicing rights to market in the fourth quarter, with the expectation of being paid more than $1.8 billion to reduce leverage.
Bayview Asset Management, which acquires servicing rights and uses five subservicers, has built a recapture strategy including through its acquisition of Guild Mortgage. Managing director Michael Lau said Bayview has partnered with sovereign wealth funds and pension funds that have long-duration strategies. "MSRs are great because they're not correlated to the equity or the bond market," he said.