In today’s complex mortgage securitization market, we have seen the continued evolution of the financing of—and structuring investments in—servicing rights and servicing cash flows, especially with regard to Fannie Mae, Freddie Mac and Ginnie Mae mortgage servicing.  Servicers and their investment banks have been working for years to develop efficient ways to finance mortgage servicing portfolios. Fannie Mae, Freddie Mac and Ginnie Mae have been sensitive to the needs of their servicers to access greater liquidity, balanced against the need for the agencies to retain control over the servicing of their mortgage loans and collateral, while increasingly, investors (largely fund investors and REITs) have become interested in financing MSRs and investing in excess servicing spread strips. 

Hunton Andrews Kurth LLP brings together lawyers from our structured finance, corporate secured lending, private equity, tax and bankruptcy groups to assist our clients in developing innovative transactions for financing and investing in MSRs, and work with the agencies to find realistic ways of balancing the market’s need for efficient financing and the agencies’ need for control. 

Drawing on our combined experience, we represent and advise numerous fund investors and REITs on excess spread investments through private equity and lending structures, and  servicers in connection with joint ventures to facilitate investments in servicing cash flows. Additionally, we represent lenders and borrowers on loans secured by agency servicing rights and agency and private-label pools of excess servicing spreads associated with MSR portfolios.