The Rocky Road for Non-Bank Servicers

first_img April 21, 2016 1,150 Views  Print This Post Dallas, Texas-based Nationstar Mortgage was the only one out of the three largest U.S. non-bank mortgage servicers rated by Moody’s to turn a profit during 2015, according to Moody’s Investors Service’s Servicer Dashboard on Thursday.Nationstar’s net income for 2015 was $43 million, while the other two largest servicers, Ocwen Financial Corp. and Walter Investment Management Corp., posted losses of $246.7 million and $263.2 million for last year, respectively.“Nationstar was the only large Moody’s-rated non-bank mortgage servicer to be profitable in 2015, and its net income was just $43 million,” said Warren Kornfeld, Moody’s analyst. “Concurrently, all three non-bank servicers’ reliance on confidence-sensitive, short-term funding heightens their liquidity and refinancing risk, while Walter faces the additional challenge of a weak capital position.”According to Moody’s, profitability has been weak for non-bank servicers over the last couple of years due to mortgage servicing right fair value adjustments, goodwill impairments, and higher regulatory expenses. Operating costs as a percentage of revenues for both Ocwen and Walter have risen as a result of intense regulatory scrutiny for residential mortgage servicers, according to Moody’s; however, Nationstar’s operating costs as a percentage of revenues have been more steady. Moody’s expects that Nationstar’s earnings will improve only marginally in 2016 as operating costs rise due to increased regulatory scrutiny.“Concurrently, all three non-bank servicers’ reliance on confidence-sensitive, short-term funding heightens their liquidity and refinancing risk, while Walter faces the additional challenge of a weak capital position.” Warren Kornfeld, Moody’s AnalystElsewhere in Moody’s Servicer Dashboard, Nationstar and Ocwen continued to have a higher level of loss mitigation than their bank peers in Q4 2015 while re-default rates on modifications either remained flat or improved slightly. The non-bank servicers also had lower missed payment to foreclosure referral timelines compared with bank mortgage servicers (less than one year on average for subprime for non-bank servicers, compared with more than two years for bank mortgage servicers). Subprime collection metrics continued to improve for all mortgage servicers, both bank and non-bank, in the country in the fourth quarter; Wells Fargo was tops in subprime, and CitiMortgage led in prime and Alt-A, according to Moody’s.New delinquencies and roll rates experienced declines in Q4, notably for subprime loans, largely as a result of ongoing improvements in the economy, according to Moody’s. Tagged with: Nationstar Mortgage Non-Bank Servicers Profits Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago The Rocky Road for Non-Bank Servicers Related Articles in Daily Dose, Featured, News About Author: Brian Honea Nationstar Mortgage Non-Bank Servicers Profits 2016-04-21 Brian Honea Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days agocenter_img Subscribe The Week Ahead: Nearing the Forbearance Exit 2 days ago Previous: MCS Announces Formation of MCS Solutions Next: Is Securitization All It’s Cracked Up To Be? Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / The Rocky Road for Non-Bank Servicers Sign up for DS News Daily Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days agolast_img

Leave a Reply

Your email address will not be published. Required fields are marked *