Servicers in Flux Losing Share

Washington-The third quarter wasn't a particularly exciting time in terms of servicing portfolio gains (or declines) but certain top-ranked firms experiencing a run-off in receivables all have one thing in common: their commitment to the business is, to some degree, in a state of flux.

According to exclusive survey figures compiled by Mortgage Servicing News and the Quarterly Data Report, four firms among the top 15 servicers saw declines: CitiMortgage (down 9%), Residential Capital Corp. (down 3%), National City Mortgage (down 9%) and Aurora Loan Services (down 10%).

Otherwise, every firm among the top 15 grew their residential servicing portfolios with Bank of America and Wells Fargo & Co., once again ranking first and second, respectively. BoA serviced $2.148 trillion at Sept. 30 (up 7% compared to 3Q08), followed by Wells with $1.793 trillion (up 19%) and Chase ($1.4 trillion/up 68%).

Chase's gain looks impressive but only because a year ago it did not own the receivables of Washington Mutual, the giant Seattle thrift that it bought with government assistance.

BoA grew its servicing market share to 21.77% compared to 20.9% in the second quarter. Wells also experienced a slight gain in its market share (to 18.18%) with Chase posting a decline.

But for the top-ranked firms, all eyes are on CitiMortgage, ResCap, National City and Aurora. CitiMortgage, whose biggest investor is now the U.S. government, is de-emphasizing its presence in mortgages. Its residential origination volume fell 42% in the third quarter, the worst showing by any top 10 firm.

ResCap - which also is being propped up by the government - continues to lose money and its subservicing business lost its top executive in early 2009.

NatCity is now owned by PNC Financial Services, a bank that has never been enamored with the residential business. Aurora was an affiliate of Lehman Brothers, which filed for bankruptcy a year ago.

Aurora was not a party to the bankruptcy and is supported by a depository that is still open and operating. The company stopped funding loans 18 months ago but may re-enter the market. It declined to talk about its future plans with MSN.

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