Cadwalader’s Speers Is a Panelist at IMN’s 6th Annual Residential Mortgage Servicing Rights Forum

Apr 19, 2019

Cadwalader counsel Taylor Speers participated in a panel discussion titled “Financing in the MSR Market” at IMN’s 6th Annual Residential Mortgage Servicing Rights Forum held on April 15-16 in New York. The event annually gathers key industry stakeholders, including owners and administrators of mortgage servicing rights (MSR), to delve into a multitude of related issues, including origination trends, regulatory perspectives and more.

Speers, who practices in Cadwalader’s Capital Markets Group, was joined by the following panelists: Dominic Obaditch, Director, Credit Suisse; Tricia McKitty, Director, Freddie Mac; Roy Hormuth, Director, Ginnie Mae; Thomas Hiner, Partner, Hunton Andrews Kurth LLP; and Paul Jorissen, Partner, Mayer Brown LLP as the panel moderator.

The panel examined the evolution of MSR financing, with a focus on the recent addition of MSR securitization – currently available for Fannie Mae and Ginnie Mae MSRs – and the potential benefits of this structure, which include:

  • For servicers – greater diversification, broader sources of liquidity and support for both long-term and short-term financing needs;
  • For agencies – consolidation of all investors’ interests into a single secured party, with the addition of structural safeguards that facilitate management of the collateral;
  • For investors – an acknowledgment of counterparty risks and the inclusion of features that focus on the interplay between leverage and asset valuation

In conclusion, the panelists agreed that MSR financing will continue to evolve as non-bank servicers seek to establish more capital-light balance sheets, whether through securitization structures, servicer advance financing, more complex excess spread sales facilities, or any combination of these with more standard financings.

“The collective expertise on our panel portrayed the dynamic state of MSR financing in today’s market,” Speers said. “In particular, growing activity in MSR securitization opens up new doors for non-bank servicers, and provides options for both long-term and variable financing to address servicer capital needs.”  

Speers has practiced extensively in the residential mortgage space throughout the majority of his legal career. In addition to serving as external legal counsel, he also spent time as the lead transactional attorney for what is now one of the nation’s top non-bank residential mortgage originators and servicers during its period of rapid growth. Since transitioning back into private practice, his primary focus has been on residential mortgage loan financing and agency residential mortgage servicing rights financing, serving as non-partner lead on numerous whole loan warehouse facilities, Freddie Mac and/or Fannie Mae servicing right facilities, a direct agency lending facility, and securitizations of Ginnie Mae and Fannie Mae mortgage servicing rights.

 

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