General World News

GSE repurchase risk is rippling through the MSR market

The mortgage servicing rights (MSR) market has been very active this year, with robust deal flow that is on par with last year’s record $1 trillion in trading volume and with generally good pricing for MSR packages, industry experts agree. 

A fly in the ointment, however, particularly for some independent mortgage banks (IMBs), is the elevated risk of agency loan-repurchase demands — triggered by loans that violate Fannie Mae’s or Freddie Mac’s rep and warranty policies due to some defect discovered during the agencies’ post-origination quality-review processes.

Industry players who details ⇒

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