Top Ten See Small Gain
It's not easy being a servicing giant these days. Receivable "run off" is rampant and valuations are in the dumps.
But with interest rates continuing to rise well above their early summer lows, good news could be on the horizon.
According to figures compiled by Mortgage Servicing News and its affiliate, the Quarterly Data Report, the top 10 servicers as a group increased their market share to 52.09% in the third quarter, a 0.93% share gain compared to the second quarter.
However, some top servicers actually lost market share and saw their volume of home receivables decline, at least by a little bit.
Washington Mutual, Seattle, for example, the nation's largest servicer, saw its base of receivables decline slightly to $722.05 billion from $726.92 billion in the second quarter. Its market share slipped to 10.57% from 10.85%.
But the second-, third- and fourth-ranked servicers - Wells Fargo Home Mortgage, Countrywide Financial and Chase Home Finance, respectively - managed to increase both their portfolios and market shares.
As this publication went to press, the yield on the 10-year Treasury was holding steady at about 4.45%, well above the low of 3.11% set in the late spring/early summer. (Mortgages are priced off the 10-year.)
Refinancing applications declined dramatically this fall and early winter, and some top-ranked firms are looking at making adjustments to their servicing "impairment" accounts which means servicing revenue could rise nicely in the next few quarters.
Some servicing brokers believe that rates have risen enough that large portfolios could start changing hands soon.
Dan Thomas, managing director of Mortgage Industry Advisory Co., New York, predicted that the first quarter will be a busy one with servicing sales picking up.
"I think we are going to see a lot of portfolios for sale in the first quarter," he told MSN.
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