The Exchange: Figuring Out Mortgage Handling Rights


Bee BSI Financial ServicesBrandon McGee is responsible for the company’s mortgage rights and portfolio acquisitions and oversees and supports the day-to-day management of the company’s growing service portfolio.

McGee, a 15-year veteran of the mortgage industry, previously worked Fannie Mae 11 years, most recently as a relationship manager. Prior to that, he was Senior Portfolio Manager, where he managed the performance of Fannie Mae’s largest subservicer and MSR investors to meet expectations and requirements related to customer portfolio maintenance, investor reporting, delivery accuracy and other service operations. McGee has also held various positions in JPMorgan Chase’s mortgage division and H&R Block Mortgage.

What are some of the main challenges currently facing mortgage rights management?

In no particular order, uncertainty surrounding the resolution of mod and forbearance activity, particularly on the side of the government and VA. How are they going to handle the loans when they leave tolerance? How to engage borrowers who are unable to take advantage of other agencies’ procrastination solution. When and how are the execution processes rolled out and how can this be done? So there is still some long-term uncertainty about the impacted borrower population. Other than that, I would say prepayment risk, right? Rates have never been this low. We don’t expect them to return to pre-COVID-19 levels anytime soon, so you always look at your prepayment risk and try to determine it accordingly.

BSI was in an excellent position to take advantage of the MSR markets at the outbreak of the pandemic. Many buyers in the market withdrew, so there was a lack of liquidity. BSI had plenty of dry powder and capital, with the resources to capitalize on it, and quickly grew to be one of the best buyers in the industry for MSR.

Furthermore, I would say that staffing is another top challenge. It’s just completely different. BSI, as we have grown, we have had to recruit staff, which is a challenge in a pandemic world. It’s more competitive. We see that there are no more regional job markets, at least not like before. I live in Dallas, but I could easily interview for a job in New York City or Florida or even Alaska. For example, in our own Capital Markets team here at BSI, we have a member from Hawaii. It’s a challenge that many can try to turn into an opportunity, as we have done.

I would also like to say technology integration especially when we are talking about buying MSR from sellers. It is a challenge. We are great to live in this digital age where there are so many solutions, but finding the right solution can be difficult. It is something that we have had to resolve as we work with different vendors, as well as manage our own internal capabilities to automate as much as possible to ensure that the on-boarding experience is seamless for both our sellers and our borrowers and ensures a good experience for everyone included.

You worked at Fannie Mae for more than ten years. What are the main lessons you have learned from that part of your career?

Big question. I spent 11 years there with Fannie Mae, and it actually felt more like five. I went to see Fannie Mae in, I think it was 2009, so just after the 2008 financial crisis. All I learned is expect the unexpected, right? There are all kinds of markets. My time there was booked on the one hand by the financial crisis of ’08 and then the pandemic on the other. Expect the
unexpected. Things are just going to change.

One thing I did see through Fannie Mae is that they encouraged people to stay in touch with their clients, with their clients, with their colleagues, even with the borrowers in terms of viewing reviews and reading borrower sentiment articles and such. You must be connected and you must have your finger on the pulse.

Other than that, I’d say a few other takeaways I’m applying for here: you can’t be everything to everyone, so it’s best to be yourself, especially if you’re BSI and working with so many people. various counterparties of the seller. You can wrap around the shaft and try to lean back in front of everyone. That doesn’t mean you don’t still try to work and be as flexible as possible, but I think everyone benefits if you set clear expectations about what we can and cannot do. Then try to be as flexible as possible within those limits.

In addition, be obsessed with customer service. It’s the big things, and it’s the little things. It ensures that you call your customers back the same day. It literally makes them feel surrounded, right? They are central to everything we try to do here at BSI, and that was a big mantra at Fannie Mae. I think it will serve us well here at BSI, and I look forward to making this happen.

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