Unlevered MSR's produce maybe 9-10% returns excluding hedge costs at market prices. Since neither TWO or any other nonbank can safely finance MSRs without taking substantial refinance risk, just how can this asset "change everything" for the better? The reason banks hold most of the servicing is because they can leverage it with deposits and earn a decent return. I agree, particularly if TWO ends up with $1 billion of capitalized MSRs, it will change everything for the worst. What say you?