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

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...