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Servicer Portfolios Up, Earnings Down

Compared to the first quarter, mortgage servicers saw their servicing portfolios grow in the second quarter. But earnings per loan slipped.

In its Quarterly Mortgage Bankers Performance Report, the Mortgage Bankers Association indicated that the average servicing portfolio was 40,122 loans for $6.2 billion.

The average was up from 36,769 loans for $5.6 billion in the previous quarter but below 47,627 mortgages serviced for $7.1 billion in the second-quarter 2010.

The findings were based on MBA’s survey of 167 mortgage servicers.

The number of loans serviced per full-time employee climbed to 1,013 from the first quarter’s 959 and the 799 loans per employee a year earlier.

The average expense for a servicing employee rose to $58,721 from $55,913 in the first quarter and $56,030 in the same period last year.

Around 11 percent of loans were sub-serviced for others.

Servicers earned an average of $64 per loan serviced in the first quarter, slightly less than the $65 earned three months prior. While earnings per loan was much lower at $2 in the second quarter of last year, earnings jumped to $89 in that period when only comparing the results for companies that participated in surveys for both periods.

Second-quarter per-loan earnings were a negative $167 at firms with less than a thousand loans serviced. But the number shot up to a $161 profit for servicers with between 1,000 and 5,000 loans in their portfolios. At the biggest servicers, those with more than 50,000 mortgages serviced, earnings were $85 per loan.

Servicing revenues worked out to 34 basis points in the second quarter, including 5 BPS for late charges. Revenues were 35 BPS three months earlier and a year earlier.

Direct expenses worked out to 16 BPS versus 17 BPS in both prior comparison periods.

Indirect expenses were 4 BPS, down from 5 BPS in the first quarter and the second-quarter 2010. This category included 0.76 BPS in “unreimbursed FC/REO Svg expenses.”

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