Eric Hagen: Hey, good morning, guys. How are you doing? The MSR portfolio looks really stable here, maybe two questions. The first, just asking about your expectations for recapture and the piece that isn’t subservice directly by you, how you think about that?
Michael Nierenberg: I would say everything kind of — everything is added to money at this point. We do have some servicing with Cooper that goes back to our longstanding relationship with Jay and his team and when we were at fortress when Cooper was owned equity funds there. We have some stuff with loan care. We’ll continue to work with some third parties. We just want to make sure the economics are aligned with the best way to think about recapture for our shareholders. But — with — as I pointed out earlier in my remarks, with the weighted average coupon in the US housing market, give or take around 3.5 or so percent, these things are so far out of the money. You’re not going to see a ton of recapture. Our thing and probably similar to, I think, the approach that Rocket’s had, customer retention is a huge deal.
Acquiring customers is a huge deal. We have three million of them. So that’s a win. How we roll out other products to them, whether it be in consumer things, credit cards and other things is something that we are working hard on. And again, it’s not necessary to do a transaction on the mortgage side because if they’re not going to refinance, how do you keep them? How do you develop brand awareness? So we’re spending a lot of time on the marketing side, as well as thinking about other LLBs that can be accretive and drive more earnings for shareholders.
Eric Hagen: Yeah. That’s helpful detail. Thanks. And then another one on the MSR. Do you have a rough idea for how big of a margin call you could withstand in that portfolio? And anything that could bring about a margin call other than a change in interest rates? And really just how you cushion for that risk in the portfolio more generally? Thanks.
Michael Nierenberg: Have either make sure your financing is done in the capital markets in term structures, which we do or make sure that you have non mark-to-market facilities, which we have. As it relates to shocks, I don’t think we’ll see a bigger shock than we saw in 2020, and we withstood that extremely well. The other thing is with our financing facilities, all non mark-to-market, the team graded in capital markets, and we have term structures on pretty much all of our, what I would call, non-agency assets, we feel really good where we are.
Eric Hagen: Yeah. Great. Thank you guys very much.
Operator: The next question comes from Kevin Barker with Piper Sandler. Please go ahead.
Kevin Barker: Good morning. Thanks for taking my questions. I just wanted to follow-up on the origination side. Do you see any particular opportunities emerging within certain channels that may make it more advantageous to invest in that space? I appreciate the comments around limited amount of refi opportunity with mortgages at 3.5%. But there are certain channels that may be opening up, whether it’s correspondent, broker or even proportions of the shelter business. Is there anything in there you see that you can reinvest in?
Michael Nierenberg: Baron, do you want to take it?
