Steve Delaney: And Ivan on the mezzanine/pref, I mean do you actually see opportunities to take equity interest in some of these financings and sort of be more of a merchant banker than just a banker, just a lender?
Ivan Kaufman: I think it’s a combination of everything, depending on the leverage. At a low leverage basis, it’s more of a coupon. At the higher leverage you go, then you start to get a higher yield, which is a combination of pay and participation.
Operator: We’ll take our next question from Stephen Laws with Raymond James.
Stephen Laws: Congratulations on a very solid quarter, pretty strong numbers across the board looking versus my estimates. Wanted to follow-up on the mez. How big of an opportunity is that? I think you may have mentioned in the prepared remarks some $20 million of investments, some $200 million of Agency volume? Can you talk about how big of an opportunity that is? Or how much — how large will we see that get on your balance sheet over the coming couple of years?
Ivan Kaufman: I’d say I think it varies. We’re looking right now — I think we did — Paul, I think we did in the fourth quarter about $20 million as well, right? In December.
Paul Elenio: We did. We did $20 million of mez, Ivan, behind Agency product that we brought over from our balance sheet.
Ivan Kaufman: Yes. And we’re looking at depending on how much we want to juice it up between $15 million and $14 million a month, that would be the level. And then it really depends on the market, the yield curve where the purchases start to pick up. So those are the factors. But I would forecast conservatively $20 million per month.
Stephen Laws: Paul as you think about margins, I know the mix impacted the MSR margin a little bit in Q4. But when you think about those margins looking out this year, is there a range you see those playing out between over the next few quarters?
Paul Elenio: Yes, I think that’s a good question, Steve. Certainly the larger transactions, as I mentioned in my commentary that we did the portfolio deals really weighed down the MSR because you’re getting a lower servicing fee, but a bigger transaction done. I would say that, we’ve been running anywhere from 1.30% to 1.35% on the gain on sale margin. I still think that holds. I think we’ve done a nice job there, even given where interest rates have gone. And I would say on the MSR side, it was set certainly lower this quarter than it normally would be without big portfolio deals like that. I’d say, we are running probably anywhere from 1.25% to 1.45% is what I think I’m estimating going forward, depending on deal size and on the tiers of credit.
We have seen a little bit of a backing off on the servicing fee in Fannie Mae, a little bit lower than where it’s been, but it’s still really strong. We’re still seeing servicing fees on new Fannie loans anywhere from a low of mid-30s to a high of mid-40s. So I still think we will get some nice servicing strips and put on some and nice MSRs, but I think 1.25% to 1.45% is probably an appropriate range, absent any large deals.
Stephen Laws: Appreciate the color on that Paul. Thanks very much for your time this morning.
Operator: Thank you. We’ll take our next question from Rick Shane with JPMorgan.
