Milliman has acquired Blue Water’s mortgage servicing rights valuation and hedging services from Apex Analytics Corp., extending a wave of mortgage industry investment beyond servicing portfolios themselves to the technology and expertise used to manage their value.
The transaction adds Blue Water’s MSR hedging platform, customer base, trading professionals, and quantitative analytics team to Milliman’s mortgage solutions practice. Financial terms were not disclosed.
The acquisition comes amid heightened industry attention to MSRs, which have become central to several major mortgage transactions. Rocket Companies’ acquisition of Mr. Cooper created a combined platform servicing approximately $2.1 trillion in loans, while CrossCountry Mortgage’s acquisition of Two Harbors Investment Corp. included the RoundPoint servicing platform and an MSR portfolio of approximately $176 billion.
Those transactions centered on ownership of servicing assets and the recurring revenue and borrower-retention opportunities they provide. Milliman’s purchase addresses another side of the equation: determining what MSRs are worth and managing the risk that their value will change.
MSR values are particularly sensitive to interest rates and anticipated borrower behavior. When mortgage rates fall, borrowers are more likely to refinance or pay off their loans, shortening the period during which a servicer collects revenue. When rates rise, loans generally remain in servicing portfolios longer, potentially increasing the value of the associated rights.
Hedging strategies are intended to reduce the financial volatility created by those changes, making valuation models and borrower-prepayment assumptions important to mortgage companies’ balance-sheet and capital-markets decisions.
“We are thrilled to welcome the Blue Water MSR team to Milliman,” said Brett Ludden, managing director and head of mortgage solutions at Milliman. “Blue Water’s sophistication in MSR hedge analytics is an excellent complement to our deep mortgage advisory expertise.”
Ludden said the addition of Blue Water’s trading and quantitative analytics professionals would strengthen Milliman’s mortgage solutions practice and its services for clients.
Milliman said it plans to combine Blue Water’s hedging platform with its existing work in mortgage behavior modeling, quantitative analytics, hedging strategies, software development, and data science. The transaction also broadens Milliman’s mortgage advisory customer base.
Apex Narrows Its Technology Focus
Blue Water’s former parent, Apex Analytics, said the divestiture would allow it to concentrate resources on property intelligence technology, appraisal workflow, and assessment products.
Apex Analytics was formerly known as Voxtur Analytics. The company is now focusing its investments on software, property data, geospatial technology, artificial intelligence, and workflow automation used by assessors, government agencies, and other public-sector property assessment organizations.
“Today’s announcement allows us to further concentrate our resources, talent, and investment on the technologies that define the future of assessment,” said Ryan Marshall, CEO of Apex Analytics. “By streamlining our portfolio, we can accelerate innovation in assessment software, artificial intelligence, data analytics, and workflow automation.”
The sale separates Blue Water’s mortgage-focused services from Apex’s remaining property assessment operations, placing the MSR business within a company that already provides mortgage risk management and advisory services.
*This article was primarily written by a human author. AI tools were used in a limited capacity for research assistance or light editing.
