Portfolio Runoff

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Portfolio Runoff

A reduction in the mortgages represented in a mortgage-backed security as a result of prepayment of some of the mortgages in it. This can reduce the yield on an MBS and, at times, force the security holder to reinvest proceeds at a lower coupon rate than the MBS paid. Most mortgage-backed securities provide safeguards against portfolio runoff unduly affecting yields. See also: Prepayment risk.
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This is the highest level of margin compression of all banks in the peer group, reflecting the impact of the covered loan portfolio run-off. This was exacerbated by BKU's deposit gathering efforts over the last year as the bank has conducted promotions in a rising rate environment.
Nationstar is one of the largest and fastest growing servicers in the United States and operates an integrated loan origination business that mitigates servicing portfolio run-off and improves credit performance for loan investors.
Ocwen generated revenue of $330.8 million, down (35.2)% compared to the first quarter of the prior year, primarily driven by the impact of sales of agency mortgage servicing rights (MSRs) and portfolio run-off in 2015.
In addition, Nationstar operates an integrated loan origination platform, enabling Nationstar to mitigate servicing portfolio run-off and improve credit performance for loan investors.
Most servicers have responded to portfolio run-off by hunting for bulk servicing buys or industry consolidation plays, or opening the spigot on new loan origination.