Delinquencies are continuing their decline according to Fitch Rating’s U.S. RMBS Servicer Handbook for October 2017.
The U.S. RMBS Servicer Handbook gives descriptions of all Fitch-rated servicers, their servicer ratings and key rating drivers, portfolio size and key attributes, important trends, links to the fill RMBS servicer reports, and Fitch analyst contact information.
According to the report, subprime delinquencies are declining for most companies servicing underperforming mortgage loans. However, two of the most prominent companies in the space are continuing to add the loans.
Select Portfolio Solutions increased its portfolio by 14.4 percent from Q2 2017 to about 574,000 loans as its subprime RMBS portfolio grew approximately 433,000 loans. Mr. Cooper (Nationstar Holdings), experienced a 7 percent increase to 2.798 million loans and remains the largest non-bank servicer, according to the report. Its subprime portfolio is smaller than both Ocwen’s and Select Portfolio Solutions by approximately 146,000 loans.
Ocwen, the largest subprime RMBS servicer with about 617,000 loans, experienced a decline in its total portfolio to 1.276 million, a 3.8 percent decline.
Overall, non-bank servicers experienced significant declines in subprime delinquencies from 25.1 percent last quarter to 22.8 percent. Year-over-year, subprime delinquencies were at 27.3 percent. Bank servicers also declined, but at a slower rate than non-bank servicers—from 8.5 percent last quarter to 8.6 percent and unchanged from this time last year. Subprime delinquencies for both non-banks and banks improved to approximately half the levels that were seen at the end of 2013.
“As the third-largest savings bank and a top-five mortgage originator in the U.S., Flagstar's servicing portfolio had the second lowest 60+ delinquency rate among Fitch's nine rated bank servicers, behind only First Republic Bank.”
According to the report, Flagstar services over 400,000 residential mortgage loans with an unpaid principal balance (UPB) of approximately $87 billion.
To see the full report, click here.