New Residential Investment Corp. is one of the staple names in the investment management industry when it comes to residential investments. One of the focus investments of New Residential Investment Corp. is Excess Mortgage Servicing Rights. These kinds of investments dominate a third of their major investments in the company’s portfolio. Excess Mortgage Service is the amount of money left, or the percentage of cash flow that remains after the funds have been divided into principal payments. Mortgage Servicing Rights are assets that transfer the service portfolio from the individual to the manager – when rights are transferred, the investment manager can act as the controller of the funds, so the manager can distribute and collect payments.
Excess Mortgage Servicing Rights are very visible in the market, and there are about $10 trillion dollars worth of investment opportunities that are available in the market. Currently, majority of Mortgage Servicing Rights are held by banks, but New Residential Investment Corp. foresees that this percentage will decline in the near future because of heightened capital reserve requirements. As banks sell their rights to private companies, there are more opportunities opening for private firms like New Residential Investment Corp., and the opportunity to co-invest in Excess Mortgage Servicing Rights can be held by the company.
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