Michael Spacey's  Instablog

Michael Spacey
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This is a pseudonym. Started my career in structured finance, moved into corporate debt, and now equities. My investment style is focus on the fundamentals and figure out what the company is worth. Writing is a way for me to gather feedback and information, rather than convincing someone else to... More
My blog:
The Cleanup Call
  • Key Questions For NSM 0 comments
    Jan 25, 2014 9:46 PM | about stocks: NSM
    • 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.
    Stocks: NSM
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