Two Harbors Investment Corp. has entered commitments to add another $15 billion in mortgage servicing rights, executives said during the company’s first-quarter earnings call on Tuesday.
Although the company reported a loss, a forecast recession could make it increasingly necessary to advance funds against missed borrower payments, and a recent banking crisis has threatened availability of corporate lending, executives expressed confidence in the company’s finances.
“Funding for both [residential mortgage-backed securities] and MSR remains stable and we have more than ample liquidity,” President and CEO Bill Greenberg said in a press release.
Some analysts were cautiously optimistic as well, at least in the near term.
“We’re not very concerned about the supply or access to advance funding right now, although we think higher interest rates could complicate the outlook for servicers to offer effective loan modifications to borrowers, which could in turn drive funding conditions,” BTIG analysts said.
The announcement, in conjunction with news of other MSR purchases by Mr. Cooper, add fuel to hopes that sales in the market will continue to gain traction with buyers.
Two Harbors reported a $176.8 million loss for the quarter, or $63.2 million on a comprehensive basis. The company had reported a net loss of $262.4 million and $160.2 million in income on a comprehensive basis the previous quarter.
A year ago, Two Harbors reported net income of $271.5 million and a comprehensive loss of $60.3 million.
Two Harbors has an agreement pending to acquire RoundPoint Mortgage Servicing.
