Countrywide Ranks #1 in B&C Servicing
Countrywide Home Loans is now the largest subprime residential servicer in the nation, eclipsing such industry stalwarts as Household Finance and CitiFinancial.
Moreover, Countrywide's ascension to the top of the subprime heap comes eight years after it funded its first subprime loan.
According to new rankings compiled by Mortgage Servicing News, the Calabasas, Calif.-based Countrywide serviced $58.07 billion in subprime home mortgages at the end of June, a 104% increase from the same period last year. (See table, page 1)
Household Finance, Prospect Heights, Ill., ranked second with $56 billion, and CitiFinancial, Baltimore, ranked third with $54 billion. (Household is owned by a foreign bank, HSBC Holdings, while CitiFinancial is owned by financial services giant, Citigroup.)
For several years either Household or CitiFinancial (or its predecessor companies) have ranked first among B&C servicers.
It has been no secret that Countrywide likes the subprime market. In the second quarter, Countrywide (also the nation's largest "A" paper lender) funded $9.55 billion in subprime mortgages.
In that quarter, subprime production accounted for about 10% of its overall fundings. In all of 2003, just 4.37% of Countrywide's loan production entailed subprime credits.
It appears that as "A" paper production slows, especially conventional refinancings, Countrywide is relying more heavily on nonconforming loans to grow its business and steal market share away from competitors.
Countrywide also is subservicing subprime mortgages for other players in the market, including Washington Mutual, Seattle, a key competitor for the company in the California market.
Countrywide is the fifth largest subprime subservicer in the nation, according to MSN/QDR. At the end of June it had $5.58 billion in subprime subservicing contracts.
There are now $770 billion in outstanding subprime loans in the U.S.
As reported by MSN back in June, Countrywide is in the throes of forming a subprime unit in the United Kingdom.
The subprime mortgages that Countrywide will purchase or fund overseas are more akin to alt-A loans in the U.S. (The company will not be going into the lower credit spectrums in the U.K.)
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