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KBRA Releases U.S. Residential Mortgage Bank Update: Mergers and Dispositions
[March 20, 2019]

KBRA Releases U.S. Residential Mortgage Bank Update: Mergers and Dispositions

Kroll Bond Rating Agency (KBRA) releases its U.S. Residential Mortgage Bank Update: Mergers and Dispositions report, which highlights the performance of companies active in the U.S. residential mortgage industry.

  • The companies discussed include major U.S. banks that dominate the mortgage sector and KBRA's rated mortgage-centric banks and nonbank financial institutions (KBRA's FI Mortgage Panel). Our views and observations also address macroeconomic trends, the competitive landscape and emerging themes impacting KBRA's FI Mortgage Panel.
  • In this issue, we conclude that M&A activity, which was predicted to be brisk, has not materialized. Potential buyers are not enamored with the available platforms and sellers are reluctant to entertain deals at lower valuations. This dynamic has favored dispositions over acquisitions.
  • Many banks have questioned the risk-adjusted returns and capital requirements of mortgage lending. With fierce competition and thin margins, banks are takig a more serious look at streamlining, disposing or discontinuing these operations. This issue provides some examples where banks simply shuttered or disposed their mortgage operations, a trend we believe that will continue in 2019.
  • We follow up on gain-on-sale margin trends for key industry participants and the market for mortgage servicing rights.
  • This edition also includes commentary on the U.S. housing market, which remains relatively strong, despite rising rates and cooling refi activity.
  • Finally, the piece concludes with a 4Q18 performance and highlight summary for all companies in KBRA's FI Mortgage Panel.

To view the report, click here.

About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

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