The nation's top three ranked mortgage bankers are marking down the asset value of their servicing portfolios faster than their receivables are running off, according to figures compiled by National Mortgage News.
Bank of America and JPMorgan Chase saw the size of their MSR portfolios fall by 4% and 10%, respectively at yearend. But B of A marked down the value of its housing receivables by 24%, JPM by 12%.
Wells Fargo, on the other hand, grew its servicing portfolio by 1% in the fourth quarter (compared to the same period a year earlier), but marked down its MSRs by 9%. (MSRs can be counted toward Tier I capital.)
The MSR markdowns, though, are not surprising. All these 'megabanks' have been dealing with rising delinquencies and foreclosures the past year, although in 4Q earnings conference calls all three reported the trend of higher late payments is beginning to abate.
According to figures compiled by NMN and the Quarterly Data Report, at yearend, the nation's top five servicers were: B of A with $2.06 trillion in receivables (-4% year over year); Wells ($1.8 trillion/up 1%); Chase ($1.25 trillion/-10%); CitiMortgage ($601 billion/-16%); and ResCap ($355 billion/-5%). Their combined market share is 64%.
The only processor registering a solid gain was U.S. Bank Home Mortgage, Bloomington, Minn., which grew its portfolio by 16% to $216 billion.
Meanwhile, industry officials continue talks with the Federal Housing Finance Agency and Federal Reserve Board about restructuring the 25 basis point minimum servicing fee on Fannie Mae and Freddie Mac loans.
One industry trade group official familiar with the Fed's thinking, said of the agency: "There are many conversations going on — and no one is close to any sort of agreement." (For a complete analysis of the servicing market see this week's print edition of NMN.)
