Subservicing is increasingly becoming a tempting strategy for mortgage companies looking to rein in rising compliance and operational costs. And with an influx of capital markets investors buying up mortgage-servicing rights portfolios but lacking the infrastructure to actual manage the loans, demand for subservicing is on the rise.
"We're seeing smaller servicers that are going to service the transaction but we're also seeing subservicing," said Bill Fricke, a vice president and senior credit officer at Moody's Investors Service. "I wouldn't say one's more prevalent than the other. We're seeing both, but I think there has been more subservicing than in the past."