Interest Rate VolatilityDuring periods of volatile interest rates, there's an anticipation of a deeper drawdown for the company's valuation.
Leverage RiskThe company's riskier leverage versus peers is reinforced by the need to calibrate its liquidity position, as it carries more leverage and less liquidity than most major servicers.
Liquidity ChallengesThere is limited room to source liquidity and cut expenses, which could restrict competitiveness and leave the company challenged to properly calibrate operations when rates are volatile.