“The growth for the servicers is driven primarily by the recapture of refinances from their acquired servicing portfolios,” the KBW analysts say in a 3Q Mortgage Banks & Servicers Preview.
The analysts estimate that Nationstar Mortgage Holdings originated $9.6 billion in the third quarter, up from $7.1 billion in the prior quarter. The $9.6 billion origination estimate includes “$7.6 billion from the recaptured refinance activity,” the Oct. 14 KBW report says.
The analysts are also forecasting that Walter Investment Management will report $6 billion in forward originations for the third quarter, up from $4.7 billion in the prior quarter.
“The strong growth reflects the fact that WAC’s origination platform is still ramping up. Additionally, we expect it to benefit from HARP and the company is likely to generate a recapture rate of nearly 50%,” the KBW report said. (Walter Management Investment’s stock symbol is WAC.)