Beyond affordability: What Florida’s Amendment 3 could mean for MSR values

Florida’s push to lower property taxes is being framed as an affordability measure for homeowners. But for mortgage servicers, the proposed change could have significant consequences for income generated from escrow custodial balances and, ultimately, for the value of mortgage servicing rights. Florida Amendment 3, which will go before voters in November 2026, would increase the homestead exemption for non-school property tax levies to $150,000 in 2027 and $250,000 in 2028. The existing exemption for school district taxes would remain unchanged. If approved, the measure could eliminate a substantial portion of non-school property taxes for many full-time Florida residents. That may provide welcome relief to homeowners stretched by rising housing costs. It would also reduce the property tax funds that servicers collect and hold before remitting them to local taxing authorities, potentially altering a meaningful component of MSR economics. “This is an important issue that frankly hasn’t gotten enough attention,” said Mark Garland of SitusAMC. “If the tax component were cut significantly, that dramatically reduces the amount of funds available in those custodial accounts and the incom...