Smaller servicers of distressed residential loans have seen the size of their servicing portfolios expand a faster pace than their larger servicing counterparts.
Among special servicers that service fewer than 400,000 home loans, the size of their
servicing portfolios have grown 20 percent on a year-year-basis.
But at all servicers of loans included in residential mortgage-backed securities, weighted-average portfolio growth was just 2 percent during the same period.
Fitch Ratings reported those findings Monday based on its
U.S. RMBS Servicer Handbook.
The ratings agency said that some special servicers are reaching past distressed loans and expanding into performing servicing to offset runoff. There has been a 52 percent year-over-year increase in primary servicing across their portfolios.
“This trend is in line with takeaways from Fitch’s recent U.S. RMBS Servicer Roundtable event, in which many servicing executives noted that nonbank special servicers could seek out new origination volume to offset declining delinquent loan volume,” the New York-based ratings agency explained.
Fitch noted that banks have seen no changes in full-time staffing levels, while temporary staffing rose by 3 percent.
But at non-bank servicers, headcount has declined by an average of more than 4 percent.
Loan modifications accounted for 72 percent of loss mitigation at non-bank servicers. The total has increased from 65 percent.
