Servicers of home loans saw income tumble last year thanks to valuations and hedging on mortgage servicing rights.
An average of 74,717 residential loans were serviced for $12.101 billion by non-bank mortgage servicers last year.
Servicing portfolios grew from the previous year, when an average of 63,570 loans were serviced for $10.249 billion.
The servicing metrics were reported in the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report Q4 2014. MBA members can purchase the report for $175, while the cost is $300 for non-members.
Results reflect responses from 217 independent mortgage banks and mortgage subsidiaries of chartered banks.
Average servicing headcount
was 129 last year, three more employees than in 2013.
An average of 981 loans were serviced per full-time servicing employee in 2014,
off from 1,002 one year prior.
An average of 5.41 basis points was earned on servicing last year, plunging from 14.26 BPS in 2013.
Income was hurt by MSR valuations and hedging, which swung to a 2.93-basis-point loss in 2014 from a 6.65-basis-point profit a year earlier.
Employee expense accounted for
6.46 BPS of 2014’s expenses, off from 6.83 BPS the previous year.
For just the fourth quarter,
net financial income at servicers was an 0.96-basis-point loss.
Losses widened to 9.75 BPS at
firms that serviced more than 50,000 loans.
But at companies that serviced fewer than 2,500, net financial income was a 3.10-basis-point profit.
