Berkshire came virtually out of nowhere this month to enter the bidding process, and it still seems to be having trouble being taken seriously by the mortgage servicing industry. For example, Keefe Bruyette & Woods analyst Bose George expressed surprise in a note published late Monday after Berkshire raised its bid for the ResCap platform, which includes mortgage servicing rights on 2.4 million homes. "The increased Berkshire bid suggests the company might be genuinely interested in purchasing this platform, which if successful could create a strong competitor. We originally assumed that Berkshire's only interest was in protecting its bond position," George wrote. But Buffett's sudden interest in mortgage servicing still went unmentioned at a panel discussion in New York on Tuesday about investment opportunities in the industry at a conference hosted by National Mortgage News. Rather, the panelists appeared to be in agreement that interest in mortgage servicing rights (MSRs) is quite limited.
"Obviously supply is going to outstrip the demand from the seller's perspective on MSRs," said Rudy Orman, an executive at Residential Credit Solutions, a mortgage servicer that specializes in nonperforming loans. Orman made the statement matter-of-factly, as the preface to a question for fellow panelist Tom Piercy of Interactive Mortgage Advisors, about when pricing would "hit bottom."