Fitch: Smaller U.S. RMBS Servicers Rapidly Taking on More Loans

Another sign of the sea change taking place in the U.S. mortgage servicing industry is in the rapid growth of portfolios among smaller companies, said Fitch Ratings, New York.

The company’s quarterly U.S. RMBS Servicer Handbook reported portfolios among U.S. special servicers with loan counts less than 400,000 are growing at a faster pace than the servicing industry as a whole. These smaller special servicers reported an average year-over-year growth of nearly 20% (weighted by portfolio size). In contrast, the weighted average portfolio growth for all Fitch-rated servicers was 2%.

“While special servicers continue to maintain robust capabilities in handling distressed loans, many have expanded into performing servicing in order offset portfolio runoff,” said Fitch Managing Director Roelof Slump.

The report said primary serviced loans increased by 52% on average across their portfolios, a trend in line with takeaways from Fitch’s recent U.S. RMBS Servicer Roundtable event, in which many servicing executives noted that nonbank special servicers could seek out new origination volume to offset declining delinquent loan volume.

Other report highlights:

–Banks kept full-time staffing level, but increased temporary staff by 2.7%.
–Staffing at nonbanks decreased by 4.3% on average.
–Nonbanks increased their use of loan modifications as a form of loss mitigation to 72% from 64.8%.