Mortgage servicing demand jumps across US amid housing slowdown

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

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
Lennar's Stuart Miller, Rick Beckwitt  with the site (Google Maps; Lennar)

Lennar pays $8M for South Miami-Dade housing community site

Lennar pays $8M for South Miami-Dade housing community site
From left: Jim Cohen, Nancy Corey, Nathan Zeder, Alicia Cervera Lamadrid, Phil Gutman and Mike Pappas (iStock)

South Florida’s pandemic-fueled residential market poised for bull run in 2021

South Florida’s pandemic-fueled residential market poised for bull run in 2021
Kathleen DuRoss Ford and 300 North Lake Way (Getty, Google Maps)

Kate Ford’s Palm Beach estate sells for $55M

Kate Ford’s Palm Beach estate sells for $55M
D.R. Horton CEO David Auld and the Reserve at Jupiter site 

D.R. Horton pays $14M for land in Jupiter and Florida City for two housing projects

D.R. Horton pays $14M for land in Jupiter and Florida City for two housing projects
Jim Carr and Armando Codina with renderings of the homes (CC Homes)

CC Homes pays $12M for Southwest Ranches land for single-family community

CC Homes pays $12M for Southwest Ranches land for single-family community
Lennar Executive Chairman Stuart Miller (iStock)

“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results

“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
Oprah Winfrey and (inset) Lawrence Stroll over the unit (Getty)

You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse

You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse
Simon and David Reuben with St. Regis Bal Harbour (Getty, Google Maps)

Reuben Brothers takes over $132M loan backing St. Regis Bal Harbour

Reuben Brothers takes over $132M loan backing St. Regis Bal Harbour
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...