Skip to main content

Freedom Mortgage Earns Upgraded Outlook From KBRA

Christine Stuart
Oct 04, 2023

Strong servicing revenues and efficient cost-cutting measures highlighted; however, concerns raised over lack of hedging on substantial MSR investments.

Wall Street is looking favorably at Freedom Mortgage Corporation's first half of the year, and at least one bond rating company is changing its outlook from negative to stable. 

Kroll Bond Rating Agency (KBRA) analysts said the company has favorable operating cash flow due mostly to strong servicing revenues and a meaningful reduction in operating expenses. 

In the first half of 2023, "operating performance, which has incorporated very limited production levels and a focus on efficiently servicing its low coupon [mortgage servicing rights] MSR portfolio, has been better than most industry participants. While the potential for some modest increase in Freedom’s core leverage exists, we currently consider that likelihood somewhat lower than during 2022," Kroll analysts wrote. 

KBRA analysts added that Freedom has over 30 years of operating history and has "managed well through challenging mortgage business environments, with the current cyclical origination downturn no different, as the company has reduced operating costs efficiently and significantly, mostly through sharp staff reductions." 

The rating also considers Freedom’s predominantly short-to-intermediate term, market-funded business model, one that is similar to most mortgage banking peers.

However, analysts also warned that "Freedom’s strategic decision not to at least partially hedge its substantial MSR investment with financial instruments is considered less favorably; acknowledging that the company’s call center origination capacity in robust refinance markets has done well providing an 'operational,' and in turn, financial performance hedge."

Oct 04, 2023
Helping the H.E.L.P.E.R.s

Federal bill poised to open up market to more teachers, first responders

Dec 01, 2023
Fidelity National Financial Hit By Cyberattack

Industry-leading provider of title insurance and settlement services radio silent on reported breach.

Nov 28, 2023
Citizens Bank Bids Farewell To Wholesale Mortgage Channel

In a strategic pivot, the Providence-based banking giant will stop accepting new wholesale mortgage submissions.

Nov 16, 2023
Surprising Surge In Mortgage Customer Satisfaction, J.D. Power Study Reveals

Study found first-time homebuyers were harder to satisfy, customers don't just shop rates.

Nov 16, 2023
Women Continue To Defy Homebuying Challenges, Representing 22% Of The Market, Survey Finds

Young, educated, diverse, and increasingly savvy, women homebuyers navigate homeownership hurdles with determination.

Nov 15, 2023 Stays Bullish On Industry Disruption Amid Q3 Losses

Despite a $340 million Q3 loss,'s leadership emphasizes cost reductions, automation, and investment in technology.

Nov 15, 2023