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ARTICLE · 24 DECEMBER 2020

So You Want To Form An MSR Fund: Issues And Considerations

Mayer Brown
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Non-bank owners of mortgage servicing rights ("MSRs") are seeking asset-specific alternative private capital vehicles to fund portfolios of MSRs.

United StatesFinance and Banking
Krista Cooley
Krista Cooley
Eric Edwardson
Eric Edwardson
Haukur Gudmundsson
Haukur Gudmundsson
Laurence E. Platt
Laurence E. Platt
Lauren B. Pryor
Lauren B. Pryor
Claire Gibson Ragen
Claire Gibson Ragen
Jon Van Gorp
Jon Van Gorp
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Despite COVID-19 conditions, US residential mortgage loan origination volumes have been at historic highs, driven by a refinancing boom spurred by low interest rates and new home purchases outside of urban areas. The current mortgage market is supported by non-bank mortgage originators and servicers who lack the same access to capital and liquidity as traditional banks. To continue growing, non-bank entities have had to be creative with respect to capital sources—as we have seen through recent public offerings. 

Non-bank owners of mortgage servicing rights ("MSRs") are seeking asset-specific alternative private capital vehicles to fund portfolios of MSRs. However, unlike whole mortgage loans, MSRs cannot be easily created and sold to investors. Fortunately, through creative thinking and structuring, investors are able to utilize and enable non-bank, non-servicer, alternative capital sources to participate in the economics of MSRs. This Legal Update provides an

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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