Earnings at independent servicers of residential loans swung to a profit in the final quarter of last year. Behind the improvement were gains on mortgage servicing rights.
As
of Dec. 31, 2016, an average of 85,676 loans were serviced for $14.786 billion by the average independent mortgage servicer and mortgage subsidiaries of banks.
Servicing portfolios grew from 84,157 loans for $14.459 billion at the end of the third-quarter 2016 and 73,118 units serviced for $12.101 billion at the end of 2015.
The Mortgage Bankers Association detailed the data in its Quarterly Mortgage Bankers Performance Report Q4 2016, which is available to MBA members for an annual subscription fee of $675 and to non-members for $1,125.
There were 221 total servicers that participated in the the fourth-quarter 2016 survey, though comparisons with the third-quarter
were based on only the 186 servicers that participated in the surveys for both quarters.
As of the latest period, an average of 1,229 loans were serviced per full-time employee. Efficiency improved from 1,147 in the third quarter but was off from 1,275 in the fourth-quarter 2015.
Net financial income at the nation’s servicers was 20 BPS, swinging from a 2-basis-point loss in the third quarter and up from 5 BPS in the year-earlier period.
The wide swing in profits came from valuations and hedging on MSRs, which swung to a 19-basis-point gain in the fourth-quarter 2016 from a 5-basis-point loss the previous period and a less than 1 basis point gain in the same period during 2015.
At servicers with a portfolio of fewer than 2,500 loans, net income averaged 12 BPS. But the average was double that level at servicers with more than 50,000 loans in their servicing portfolios. The biggest profits were earned by companies with servicing portfolios of between 10,000 and 50,000 loans serviced: 29 BPS.
