Servicing: Cost of replacing MSR? Working on an article on the proper way to evaluate FCF for OCN. Although not mentioned in the article, if I apply the same methodolgy to NSM their cash flow would be WAY lower..their D&A is less conservative
- Origination: are these gain on sale margins sustainable? My gut feeling is they're not. Need to confirm but seems that GOS margin is high because they're just HARP refi-ing their existing borrowers directly.
- Volume will be down vs last year's refi boom. So there's less revenue to spread some of the fixed cost
- (my speculations) HARP loan prices in the market should be down this year. Traditionally HARP loans get a premium b/c they're less prepayment sensitive. But now with majority of recent vintages having coupon less than 5% and rates going up, prepays seem less a worry.
- If NSM originate like a normal lender such as Flagstar, GOS will be MUCH lower.