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Mortgage book values have been increasing and will continue to do so, according to one industry expert.
Book Buyers Brokerage managing director Jeff Zulman, who previously served as Vow Financial chief executive, said brokers might be pleasantly surprised by the value of their books.
“I’ve noticed that valuations have been creeping up for mortgage books and I believe that they will continue to do so,” he told The Adviser.
“My prediction is we are seeing the beginning of a trend, and people who have held off selling may well find they are able to get higher prices than previously.”
Mr Zulman said part of the reason for the increase in valuations was because trail books were a source of future cash flow and could provide attractive yields in a low interest rate environment.
Book Buyers Brokerage values books by checking every loan, trail payment, clawback and arrear, he said.
The valuation also includes a benchmarking service, so brokers can see how they rank in the marketplace, he added.
Mr Zulman said trail books become more valuable when brokers keep their database up to date and interact regularly with their clients.
“The value of a trail book is only as good as the ongoing cash flows,” he said.
[Related: Active trail books could sell for multiples of 2.5]
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