MSR valuations

​​We understand the market.


​CMC believes that the only way to understand the MSR market is to understand borrower behavior and mortgage servicing. CMC is uniquely qualified to understand and analyze your MSR assets since we buy, sell and hold MSRs on our balance sheet. Our expert team has extensive knowledge of mortgage servicing, sales/acquisitions and finance.

As part of our full suite of products and to support our mortgage bankers that retain servicing, CMC’s team delivers independent, reliable MSR Valuations and Analytics customized to meet your monthly, quarterly or annual business objectives. Our reporting and analysis will give you insight into market trends and how those trends are affecting your portfolio.

Let someone who knows servicing value your portfolio to give you actionable business intelligence. Contact us today to set up a free portfolio review.


MSR valuations benefits​

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  • Set your portfolio’s strategy
    
Our detailed reports and analysis help chart the course of your portfolio.
  • Gain actionable intelligence
    
We provide more analytics and detail than our competitors so that you can make more informed decisions about your portfolio.
  • Spot trends
    
We are uniquely qualified to understand and analyze your MSR assets since we buy and sell MSRs. Our market knowledge means we can take a high level view of the marketplace.
  • Identify product risk
    
Our reports can help you identify problematic product offerings that expose you to risk.

​Our MSR services

Perform static fair market valuation of residential MSR asset including preparation of a written fair market appraisal of residential MSR asset including stratifications and detailed reports. Provide full disclosures related to the valuation, servicing and market assumptions, prepayment and default analysis. The analysis includes:
• Detailed cash flows of the aggregate portfolio
• Sensitivity matrices for valuation assumptions that demonstrate the impact to MSR value for incremental changes to assumptions. Examples of assumptions: prepay speeds, default rates, servicing costs, and discount rates.

Tranche-level stratification for the MSR portfolio. Stratification is based on the portfolio’s risk profile (Conventional vs Government, 15 year fixed vs. 30 year fixed products, etc….). Analysis includes period to period portfolio activity and impairment testing.

Monthly analysis and capitalization of newly originated and retained mortgage assets. The capitalization of retained assets are based on fair market valuation and assigned at the loan level.

​Detailed service release premium analysis that is based on loan risk profile including origination principal balance, interest rate, investor, loan product, property state, FICO score, loan to value, and occupancy. Other adjustments are available based on need.

Cash-flow yield methodology amortization analysis, per FAS 157. Calculation, based on fair market value. The monthly amortization expense is based on the first month’s net cash fows divided by the aggregate lifetime net cash fows, multiplied by the outstanding book basis -capitalized basis.

​Comprehensive valuation and risk analysis of target portfolio as well as market analysis, purchase and sale agreement negotiation.


​ ​Comprehensive market analysis, valuation services, marketing and solicitation services, purchase and sale agreement negotiation

 

We are well qualified to conduct all phases of MSR model validation as described in OCC bulletins

A tale of two valuations

CMC approaches MSR valuation combining mortgage servicing expertise and market dynamics. Our experience and knowledge in mortgage servicing and finance translates into a well balanced approach to MSR valuation analysis. Our approach results in less volatile valuations in times of dramatic market rate movements.

Volatile fair value changes can potentially have adverse and negative impacts on a company’s financials. CMC’s approach proves to minimize such impact.

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By the numbers

97% Retention rate of our MSR valuation services clients
$4K Saved monthly, on average on your internal accounting processes by using our documentation & reporting
Up to 40% Savings on fees with our services vs. other providers

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12 questions to ask all fair value providers

As you shop for a Fair Value Provider, ask the 12 critical questions below to understand the assumptions and process that the provider uses to form the valuation results.

If your Fair Value Provider is unable to provide the answers to these questions, contact CMC so that we can walk through how each answer might affect your final valuation.

​1. How and where do you gather your market assumptions used in your models?

2. How often do you change assumptions used in your models?

​3. How do you benchmark actual prepayments and defaults within your models?

4. Do you participate in bulk MSR trades?


5. Do you participate in secondary market servicing trades and securitization?

​6. Do you have mortgage servicing and mortgage originations experience?

7. Do you perform “easy-to-follow” analyses and reporting?

8. Do you provide servicing portfolio characteristics and roll-forward reports?

9. Do you provide prepayment and default activity reports?

10. Do you provide stress testing and rate shock analyses with your valuations?

​​11. What disclosures do you provide with your analysis?

12. Do you address each model input you utilize?