MountainView Servicing Group has been advising clients on the value of residential mortgage servicing rights since 1989. Today, the company is the leading provider of MSR valuation advisory services, with more clients and volume than any other provider. In 2016, we provided 1,695 marks to market, and as of December 31, we had 253 active clients. Included in this active client base is eight of the 10 largest holders of the MSR asset as well as 36 of the 50 largest.*


Comprehensive and Current Valuation Expertise

  • Perform more than 100 portfolio valuations every month
  • Collect, synthesize and analyze data points from servicing market trades, industry survey results, agency trust IO pricing, and 250 active clients
  • Provide both static- and stochastic-based valuations
  • Possess an understanding of MSR-related regulatory and accounting issues
  • Support and facilitate clients' monthly and quarterly accounting activities
  • Participate in discussions of accounting issues with clients' regulators and auditors
  • Have regular discussions with clients, auditors and regulators related to the validation for our fair value assessment


Valuation Platform

  • Use a proprietary front-end system
  • Use Compass Analytics valuation model
  • Build prepayment models through dealer consensus, AD&Co. and CPR/CDR


Valuation Team

  • Have senior valuation analysts who average 15 years of experience with the valuation of MSRs
  • Have more than 45 years of combined experience in the data analysts managing our front-end system


Benchmarking MSR Pricing Levels

  • Market trades in the bulk and flow markets
  • Distressed trades taking into account the bifurcation of reps and warranties
  • Major industry surveys
  • SRP and cap grids
  • Pricing of similar assets, such as agency trust IO, stripped excess, agency inter-coupon spreads, and agency buyup and buydown grids
  • Data extracted from quarterly financial releases


Definition of Valuation Assumptions Set

  • Consultation with more than 200 clients on their specific experiences and modeling assumptions
  • Feedback and discussions with clients' regulators and auditors
  • Surveillance on deals in the secondary servicing market, where transaction data is based on arm's length agreements between parties
  • Prepayment and delinquency data from CPR/CDR and capital markets research (e.g., various IB mortgage desks) as well as tracking of various rates and spreads and refinance and HPA/HPD measures
  • Client-specific data for key assumptions with an understanding of what would be included in a market bid
  • Major industry surveys


Other Valuation Factors

  • Stochastic vs. static view
  • Seller, buyer and holder sentiment
  • Impact of varying MSR hedging activities
  • Current and forthcoming accounting or regulatory issues
  • Reconciling client results to MountainView peer results, striving for a consistent methodology while recognizing there is not a single correct answer


Enhanced Comparative SRP Analysis

  • Provides loan-level net execution levels for a Fannie Mae, Freddie Mac and/or Ginnie Mae seller’s existing and potential servicing released options
  • Considers all of the necessary adjustments that take place in and outside of servicing released premium pricing grids
  • Compares these pricing levels to a servicer's retained economics and to additional flow and bulk MSRs available in the marketplace
  • Bases bulk MSR execution levels on the most recent market activity

 

*Source: Inside Mortgage Finance Q2 2016 Top 100 Mortgage Servicers