In a volatile interest rate environment, mortgage servicing rights valuation (MSR) may change. McQueen Financial Advisors has the knowledge, technology and market expertise to keep your financial institution abreast of any changes in the marketplace.
Mortgage Servicing Rights Valuation (MSR) & Advisory Service
The Mortgage Servicing Rights Valuation (MSR valuation) process is an integral step in determining the overall financial success of a financial institution's mortgage operations. By offering a very personalized mortgage servicing rights valuation service, McQueen Financial Advisors will help your financial institution meet regulatory requirements as well as make informed financial decisions.
As a Mortgage Servicing Rights advisor, our Mortgage Servicing Rights valuation (MSR valuation) model is a discounted cash flow model using risk-tranches, based on Bloomberg Median Prepayment Speed expectations. The mortgage servicing rights (MSR) are pooled into homogenous coupon and product pools, known as risk-tranches, and value based on their seasoning and expected remaining lives. We then perform a present value analysis of the future cash flows for each tranche, considering both the ancillary income from the escrowed funds and current levels of delinquencies.
The risk-tranches are created by individual loan characteristics such as note rate, product type, and the investor remittance schedule. For each individual risk-tranche, McQueen Financial Advisors models the unique expected future cash flows. Geography, delinquency and float earnings are additional considerations used to value rights. Quarterly, we review discount rate and earnings rate assumptions for reasonableness and we continually stay abreast of industry developments and trends that affect mortgage servicing rights.
We help financial institutions value the amortization of their Mortgage Servicing Rights. By outsourcing your Mortgage Servicing Rights Valuation (MSR valuatrion) to McQueen Financial Advisors, you will have your needs met by:
An independent third party market valuation.
Risk-tranche level reporting.
Testing for impairment of value.
McQueen Financial Advisors also provides the following Original Mortgage Servicing Rights Management services:
Meet accounting guidelines for FAS 122/125/140.
Perform the amortization, risk-tranching and tracking of OMSRS.
Provide monthly loan level performance reporting and scenario analysis.
Test reasonableness of OMSRS factors.
Help establish valuation assumptions.
