Hedge Funds Fuel Appetite For Mortgage Servicing Rights

Sep 18 2013 | 11:02am ET

As banks pull back from the mortgage market, hedge and private-equity funds are piling in.

Fortress Investment Group and the Blackstone Group's GSO Capital Partners have both launched new efforts to buy mortgage servicing rights. The firms have been drawn by rising interest rates, a decline in new mortgages and the desire of banks to shed risk from their balance sheets.

At least $1 trillion worth of MSRs will change hands over the new two years, Nationstar Mortgage Holdings CEO Jay Bray told Bloomberg News. Fortress is the majority owner of Nationstar.

EFJ Capital, Pine River Capital Management and Seneca Mortgage Investments are also buying up MSRs. Fortress' MSR Opportunities Fund II closed in July with $1.1 billion.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...