• HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
RECURSION CO
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
BLOG

GSE Servicers

4/24/2020

 
With the CARES (Coronavirus Aid Relief and Economic Security) Act offering forbearance to households with mortgages for up to a year, the onus of payments to mortgage investors falls on the mortgage servicers. Much concern has arisen about the ability of these institutions, particularly thinly capitalized nonbank servicers, to meet these obligations[1]. In the case of Ginnie Mae servicers, the PTAP (Pass-Through Assistance Program) was rolled out to provide a line of credit to servicers in Government programs, notably FHA (Federal Housing Administration) and Veterans Administration (VA). In the case of the GSE’s, no such program has been forthcoming and instead, FHFA (Federal Housing Finance Agency) the regulator of the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, announced that servicers of loans insured by these enterprises is only required to pay investors for the first four months if a loan is in forbearance[2].
Insofar as there may still be concerns about solvency, should delinquencies spike high enough it is natural to ask who these institutions are. At Recursion Co, we have up-to-date information for all the loans in Freddie Mac pools, and about 80% of those in Fannie Mae pools, some 23 million loans. These loans come with a myriad of characteristics, including the names of their servicers. Using advanced digital tools applied to enormous data sets, we are able to identify those firms with the greatest presence in the mortgage servicer market for the GSE’s. To analyze recent trends, we look at the books of business in December 2018 and April 2020.
Picture
Run Underlying Query
As can be seen, in April 2020 the share of nonbank servicers accounts for nearly half the total, up from 46.7% in December 2018. The servicing market is extremely, and increasingly, concentrated, with the top 10 servicers out of more than 1,700 in our database accounting for over 55% of the market and the top 20 over 71%.

Within this top group are a wide variety of institutions utilizing vastly different strategies. Below find a table of the top 20 firms in both December 2018 and April 2020. In each case the market share is presented, and for April 2020 the change in this share is also expressed. Firms in Bold are banks. 

Picture
Run Underlying Query
There are a couple of key takeaways. First, while firms may have changed positions between December 2018 and April 2020, there is strong consistency between the list of names in the top 20 in the two periods. Truist Bank was formed in 2019 as the merger between Suntrust and BB&T. Truist’s market share in April 2020 came in almost 0.5% below the sum of the two predecessor institutions at the end of 2018. The merger allowed Fifth Third to gain entrance to the top 20. (#17 after attaining #21 in the prior period).

Second, despite a loss in market share of almost 1.9%, Wells Fargo retains a dominant position in the servicer market for the GSE’s with a market share over twice as large as #2 JP Morgan. (Wells bought $51B MSRs from Seneca Mortgage Services in 2017[3].) The decline in share was more than made up by a jump of almost 2.4% on the part of New Residential Mortgage which moved from #4 to #3, surpassing Quicken Loans to become the second largest servicer for loans in GSE pools.
​
The changes in this table reflect decisions made considering a myriad of factors. The Recursion dataset contains information on mortgage underwriting standards, such as credit scores and DTI’s, pricing in the form of loan rates and geography. A careful assessment of all these factors using digital tools is essential in assessing the strategies of these complex organizations in these uncertain times.

[1]https://www.washingtonpost.com/business/2020/03/27/mortgage-relief-coronavirus/
[2]https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Addresses-Servicer-Liquidity-Concerns-Announces-Four-Month-Advance-Obligation-Limit-for-Loans-in-Forbearance.aspx
​
[3]https://www.housingwire.com/articles/41248-wells-fargo-acquires-51-billion-in-msrs-     
​from-seneca-mortgage-investment/

    Archives

    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    May 2019
    March 2019
    February 2019

    Tags

    All
    Banking
    CMBS
    Cohort Analyzer
    Commercial Mortgage
    COVID 19
    CRT Analyzer
    Early Buyout
    EBO
    Fed Policy
    FHA
    Forbearance
    Ginnie Mae
    GSE
    HECM Analyzer
    HMDA Analyzer
    Mortgage Market
    Pool Level Analyzer
    Prepayment
    Recursion Achievement
    Recursion In News
    Reverse Mortgage
    Risk
    RMBS
    Team Building
    UMBS
    Underwriting

RECURSION

SOLUTIONS ​
Recursion Analyzers
​Agency XRay
​
Mortgage Company Data
Recursion DataCloud
Customized Solutions


ABOUT US  ​
Overview
​Our team
​Strategic Partner
CLIENT LOGIN   ​
Recursion Analyzers
​
Agency XRay

CONTACT

224 West 30th St., Suite 303, New York, NY 10001
Contact Us

Picture
Copyright © 2020 Recursion, Co. All rights reserved.​
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT