Will Drop in Forbearances Improve the Value of PennyMac's Servicing Assets?
The last two months have been a nightmare for mortgage originators and servicers.
The volatility in the bond market has made risk management difficult, while the decrease in interest rates has caused margin calls for investors and originators. Finally, the Coronavirus Aid, Relief, and Economic Security (CARES) Act pretty much mandated that mortgage servicers grant forbearance to anyone who can claim to have been affected by COVID-19. This can be a huge cash drain for servicers.
How have mortgage servicing assets been behaving as a result?
Source Fool.com