Incenter invests nearly $13 billion in nurturing an offering
On Tuesday, Incenter offered $12.94 billion in mortgage servicing rights, a portfolio that sits at the high end of a wide range of deals in a hot market.
Until recentlyMSR transactions typically amounted to billions of dollars on average, but those $10 billion or more have become more common as interest rates have risen and companies have sold stored services during the pandemic.
Cash flow from borrower payments under the current deal comes from loans with no defaults, foreclosures or bankruptcies, and it’s backed by government-sponsored companies Fannie Mae and Freddie Mac. Loan terms vary from 15 to 40 years. Most of the loans are 30-year products.
The weighted averages of the portfolio are as follows: coupon, 3.59%; loan amount, $225,653; FICO credit score, 779.9; and seasoning, nearly three years (33.5 months). The estimated 12-month average for escrow expressed as a percentage of principal is nearly 0.91%.
The highest state concentrations are in Florida (29.4% of mortgages based on balance and number of loans), Texas (20.5%/21.6%), Colorado (10, 5%/9.2%), California (7.2%/5.6%), Illinois (6.3%/7.1%) and New York (5.4%/4 .0%). No other state has a concentration higher than 5%.
The loans have a mix of different installment cycles. For some, payments from borrowers are passed on to investors on the due date, others do so on the same day of payment. Just over a quarter in number are loans inherited from Freddie Mac’s accelerated installment cycle.
Some loans with low down payment programs or other affordability features are in the portfolio, as are refinances in Texas. Some loans may include financing for renovations. Some have been refinanced or have been created through programs providing loans with underwater or declining real estate values.
Loan information should be accessible through the electronic mortgage registration system and the anonymous seller that Incenter represents managed the loans on Sagent’s system.
Written submissions must be submitted by 2 p.m. mountain time on May 19.