Servicing Prices Stop Sliding.(residential mortages)(Brief Article)

The secondary market for residential servicing rights appears to be firming somewhat, but that's hardly cause for celebration.

According to investment bankers interviewed by Mortgage Servicing News in recent weeks, the "flow" market is still suffering and prices for "bulk" packages are weak.

"I think the best that can be said is that prices are not getting much worse, but the firming that has been going on isn't all that great," said one veteran servicing broker.

He added that the flow market is hurting because of what he calls, "a lack of a consistent takeout."

The refi boom, though weakening, is still somewhat robust and low interest rates are causing servicing rights to prepay.

The flow business - whereby a buyer acquires a large volume of product on a forward basis - has been hurt by the sale of HomeSide Lending, Jacksonville, Fla., to Washington Mutual and the decision by some large players is to either leave the market entirely or sit on the sidelines for awhile.

Until it was sold to WaMu in early March, HomeSide was one of the largest buyers of flow servicing rights. Chase Manhattan Mortgage, Edison, N.J., is still the most active - and largest - ...