Fitch: ‘Tough Times Ahead’ for Large U.S. Mortgage Servicers

Many large U.S. bank and non-bank mortgage servicers saw their portfolios decline in the first quarter, said Fitch Ratings, New York, which warned of a “tougher period ahead” as borrowers find more opportunities to refinance their mortgages

The Fitch U.S. Residential Mortgage-Backed Securities Servicer Handbook said large servicers generally had a challenging quarter, though some entities were able to grow their portfolios through increased agency activities, subservicing and third-party relationships. It noted Roundpoint Mortgage Servicing Corp. experienced more than 13% growth in loans serviced, while Cenlar FSB, Specialized Loan Servicing and Shellpoint also demonstrated “solid” growth, ranging from 8 percent to 5 percent during the quarter.

However, Fitch Managing Director Roelof Slump said mortgage servicers face a difficult interest rate environment for the remainder of 2016, amid sustained low mortgage rates and the far-reaching impact of the recent Brexit vote in Britain.

“Maintaining portfolio size can be an important factor as mortgage servicing is a scale business,” Slump said. “Servicers that do not have associated origination platforms and service mostly performing loans are most exposed to portfolio runoff.”

Slump said smaller servicers have more nimbleness, with the ability to quickly see growth and financial benefit by being involved in new areas, “while it takes more to move the needle among the largest servicers.”

The quarterly Handbook is available at