Mortgage servicing demand jumps across US amid housing slowdown

During the recession, that sector had been profitable in dealing with troubled mortgages

TRD NATIONAL /
Feb.February 13, 2019 12:45 PM

(Credit: iStock)

Amid the recent nationwide housing market slowdown, there has been a jump in demand for servicing mortgage payments.

Mortgage servicers — the first to deal with troubled mortgages — were very profitable after the last recession, but struggled as the housing market improved. Now, things are beginning to shift again.

Sales of mortgage servicing rights tallied $600 billion in loans backed by Fannie Mae, Freddie Mac and Ginnie Mae, according to the Wall Street Journal. That amounted to a 14 percent rise compared to 2017 in loans from those government sponsored enterprises.

Mortgage servicers are responsible for handling borrower’s mortgage payments and for making sure that taxes and insurance are paid.

Some of the largest private servicers such as West Palm Beach, Florida-based Ocwen have also faced lawsuits over mishandling of mortgage payments and improperly foreclosing on homes.

Banks and non-banks have become more interested in that line of business. Smaller lenders are looking to sell those rights because they don’t have enough capital to hold the mortgages during a downturn, the Journal reported.

One company, New Residential Investment, just reported it bought $114 billion of servicing rights of loans, according to the Journal. New Residential, a real estate investment trust managed by Fortress Investment Group, provided the news during its fourth quarter earnings release Tuesday.

A number of recent data points and reports have signaled that the post-recession housing boom may be coming to an end. Highlighting this point, in the third quarter of 2018, home flipping was was at its lowest levels since the first quarter of 2015.

[WSJ]Keith Larsen

 

Related Articles

arrow_forward_ios
Arden home community and Stuart Miller

Lennar picks up 50 lots in western Palm Beach County

Lennar's Stuart Miller and a rendering of a Sierra Ranch home

Lennar closes on 89-acre Davie site for single-family home community

Robert Castellano and 150-206 Inlet Way (Credit: Getty Images, Google Maps)

Robert Castellano buys three motels in Palm Beach Shores, plans condo project

Toll Brothers CEO Douglas C. Yearley, Jr. an a rendering of Avenir Community

Homebuilder Toll Brothers adds to portfolio aimed at active adult communities in Palm Beach Gardens

Lennar at Sorrento at Venetian Parc clubhouse, Lennar Vice Chairman Stuart Miller

HOA buys clubhouse in southwest Miami-Dade from Lennar

HS Residential Ernesto Lopes and the Deering Groves,

Brazil’s largest homebuilder seeks to invest $200M in AHS Residential

Donald Horton, chairman of D.R. Horton

Homebuilder DR Horton pays $12M for 25 acres in Florida City

Construction of downtown Hollywood high-rise may start soon

arrow_forward_ios