Michael Nierenberg: Championing Increased Investments in Mortgage Servicing Rights

Michael Nierenberg is the CEO, president and Chairman of the Board, Residential Investment Corp since the year 2013. He is also since 1996 the Samuel Waxman Cancer Research Foundation Chairman. Michael Nierenberg is a champion of mortgage servicing rights (MSRs) investment. An example of MSRs is the residential mortgage loan investment, a front-line market for Michael Nierenberg.

Solid long-term relationships are a key aspect while dealing with MSRs as well as adequate funds. Michael Nierenberg is an expert in making decisions related to choosing undervalued loans. This enabled Residential Investment Corp to buy MSRs worth $114 billion in the year 2018. In dealing with MSRs, Michael Nierenberg advises that one should be properly conversant with their advantages and setbacks.

One of the main advantages of MSRs is the opportunity they provide for good steady cash flow. Most people are also not well versed with the understanding knowledge of MSRs enabling the managers to take advantage of the constant price discrepancies. Unlike many debt instruments in a fixed rate, MSRs increase with an increase in the rates curbing the impact of fluctuations in interest rates.

The main setback with MSRs is the valuation. Due to frequent price changes determine the value of MSRs hence requiring a high level of expertise to value. Lack of proper relationships in the industry can also affect their transactions. Michael Nierenberg has a commendable mastery and expertise when it comes to MSRs. He continues to lead Residential Investment Corp into making the right decisions in purchasing the underlying assets.

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