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Earnings Improve at Mortgage Servicers

Mortgage News

Mortgage servicers saw a solid improvement in quarterly earnings. Behind the rise were higher servicing fees and lower losses on mortgage servicing rights.

Income at independent mortgage servicers and mortgage subsidiaries of banks came to 96 basis points during the period from July 1 to Sept. 30.

Earnings soared from just 20 BPS in the previous quarter and swung from a 35-basis-point loss during the same quarter last year.

The

Mortgage Bankers Association provided the findings as part of its Quarterly Mortgage Bankers Performance Report Q3 2017. The report reflects data from 195 servicers, though only the 172 that participated in the second- and third-quarter surveys were reflected in quarter-over-quarter comparisons.

The improvement was driven by an increase in servicing fees
and a decrease in losses from MSR valuations and hedging.

At companies with servicing portfolios of between 2,500 loans and 10,000 loans, income was nearly 7 BPS. But income plunged to less than a basis point at firms with portfolios in excess of 50,000 mortgages.

The average firm serviced 74,054 loans with an aggregate unpaid principal balance of $12.219 billion. Servicing portfolios were up from 75,219 loans for $12.128 billion in the second quarter but tumbled from 84,963 loans for $14.456 billion in the third-quarter 2016.

The average loans serviced per full-time employee diminished, falling to 1,136 as of the most-recent period from 1,173 three months earlier and 1,211 one year earlier.

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