Mortgage servicers were able to handle more loans per employee during the latest quarter. Income, however, dropped from a year earlier because of losses on the valuation and hedging of mortgage servicing rights.
Independent mortgage bankers and servicing subsidiaries of financial institutions serviced an average of 64,144 residential loans for $10.355 billion in the third quarter of this year.
Although the number of loans serviced fell from 64,544 in the prior three-month period, the outstanding balances increased from $10.307 billion.
The metrics were reported in the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report Q3 2014.
A total of 227 companies participated in the survey, though the second- and third-quarter comparisons reflect just the 204 firms that participated in both periods.
Servicing portfolios have grown significantly from the third-quarter 2013, when the average for all participating firms was 55,532 loans for $8.919 billion.
Efficiency has improved, with an average of 1,157 loans serviced per full-time employee versus 1,091 in the previous period and 1,136 in the year-earlier period.
Net financial income at servicers increased to 7 basis points from 6 BPS in the second quarter. But servicer income slid from 12 BPS earned in the third-quarter 2013.
The year-over-year decline reflected deterioration in the net loss from MSR valuations and hedging.
Third-quarter 2014 net financial income jumped to 12 BPS at companies that serviced between 2,500 and 10,000 loans and plunged to 3 BPS at firms with servicing portfolios of more than 50,000 loans.
