In this HousingWire executive conversation, Chris Kennedy, Director of Sales and Business Development at RiskSpan, explores the key recapture strategies that lenders can follow to maximize profit in the 2025 real estate market. He stresses the importance of optimizing recapture workflows in the new market with new tools and strategies. Following that, Kennedy introduces RiskSpan’s unique strategies and tools. One such solution includes the Edge Platform—designed to survey loan portfolios and identify recapture opportunities based on current mortgage rates. Kennedy also highlights how RiskSpan empowers lenders by automating recapture report delivery and managing data.
HousingWire: Recapturing represents a valuable opportunity for lenders. Can you explain what that process looks like?
Chris Kennedy: Recapture is refinancing the customer into a new loan. It’s the quintessential function of a mortgage servicer. A mortgage servicer collects payments from an asset and repays the investor. However, in a refinance market, that asset can disappear if a servicer isn’t integrated with a strong originator. When a loan is recaptured, it’s refinanced into a new loan. This is one area where mortgage originators and loan servicers have an advantage over financial buyers and Real Estate Investment Trusts (REITs). Freedom Mortgage is the best example of a mortgage bank/servicer that’s executed its recapture strategy better than any other servicer.
HW: What unique strategies or tools does RiskSpan bring to the table that improve recapture efficiency, especially in a challenging market environment?
CK: Our Edge Platform can quickly query an entire loan or Mortgage Servicing Rights (MSR) portfolio to identify refinance-ready loans based on their current note rate compared to the current mortgage rate market. This ultimately gives more money to the borrower. This data also allows internal loan officers or consumer direct channels to mine their servicing data for recapture business daily. Using servicing data and analytics to recapture these MSRs and new loans is a hugely important function.
HW: RiskSpan offers advanced data and analytics for MSR management. How does your approach differ from others in terms of delivering actionable insights to maximize recapture and asset performance?
CK: Our Edge Platform can value all loan types, including residential, consumer, auto, commercial real estate (CRE )debt, MSR and other structured products – including agency mortgage-backed securities (MBS), residential MBS, commercial MBS and asset-backed securities (ABS). Edge can also value public credit and private credit collateralized loan obligations (CLOs). There’s only one other firm out there that has this capability. As these MSR portfolios grow, having the ability to hedge keeps you in the game, and our analytics help that. I believe we’re also the only engine or evaluation platform with an internal prepayment model.
Another unique piece of our platform is a data warehouse. At the back end of our data model we have data storage company Snowflake—a third party company that we license to build our data warehouses. We deliver all the data that we consume and report on daily into Snowflake database. If a lender partners with Snowflake, that’s a plus.
HW: For loan originators and lending teams that may not typically engage with secondary market data, how does RiskSpan make this information accessible? How do your reports or tools bridge the gap between originators and MSR data, ensuring they understand and act on recapture opportunities?
CK: RiskSpan can automate the daily delivery of recapture reports based on current market mortgage rate assumptions and loan level note rate data. We can automate the risk management reporting with daily recapture reports. RiskSpan tracks the yellows, the broker or correspondent, and the consumer direct channel with a loan ID. When originators originate a loan, they’re always on to their next deal. This gives them a pipeline of new deals coming in from the hard work they put in before. Basically we recapture all this data and have it in a risk management report.
HW: With current regulatory crackdown on practices like credit monitoring and inquiries, how does RiskSpan ensure compliance while providing effective recapture insights? What shifts do you foresee in MSR management in response to these dynamics?
CK: Our data analytics never uses a consumers’s personal identifiable information (PII), nor do we pull credit data. We only require a loan number and loan descriptive, which sort of keeps us out of the old regulatory framework. In 2025, we could see a huge booming refinance market. Actively managed residential whole-loan and MSR portfolios can recapture and refinance these borrowers into better loans, giving them new money to pay off car loans and student loans. Lenders can start reaching out to those borrowers. If there is a big rate move, they’re going to be the first call. Be proactive instead of reactive, right? It beats waiting for the phone to ring.
HW: As the industry looks toward potential rate reductions and an eventual market recovery, how is RiskSpan positioning itself to support clients in “surviving until 2025” and beyond? Are there new features or focus areas in your MSR services to help lenders maximize value in a rebounding market?
CK: RiskSpan is always focused on continuous improvement. That said, we will be rolling out some new features on our data model to make it more scalable and flexible. HELOC and Non-QM models for Residential Mortgage Investors and Issuers are also on the table. This will help issuers and investors scale, price, and hedge these non-agency loan programs.
