Wells Fargo Laps the Field in Servicing of Ginnie Maes

Mortgage & Real Estate

While it may not be sexy to say a company is still No. 1, heres something that caught my eye: Ginnie Mae servicing leader Wells Fargo is now outpacing No. 2 JPMorgan Chase by more than 250%. And thats even with Chase increasing its Ginnie servicing by 25% year over year. Now thats sexy!

Wells $420 billion of Ginnie Mae servicing at Sept. 30 was a mere 6% higher than its total a year earlier, but theres no one else even close. (All data for this content come from our affiliate MortgageStats.com.)

Of course, part of the story here is San Francisco-based Wells longtime rival Bank of America and its swift retrenchment from servicing. B of A, which has its headquarters in Charlotte, N.C., has been shedding servicing (much of it crap from the old Countrywide Home Loans portfolio) for the past couple of years and it has been especially attentive to its Ginnie Mae receivables. B of A dropped 54% of its Ginnie paper in the 12 months ended Sept. 30, falling to third behind Chase at $125 billion.

That doesnt mean there arent up-and-comers gaining market share as the big boys reorganize. As in the overall servicing leaders, nonbanks have invaded the top ranks. Ocwen Loan Services of West Palm Beach, Fla., saw a 30,000% increase in Ginnies. Thats not a typo. Thirty thousand percent. The specialty servicer went from $105 million a year ago to $32 billion at the end of the third quarter, good for seventh in the country.

Nationstar Mortgage also has put a little extra push into Ginnie Maes, increasing them by more than 1,000% over the course of the year. The Lewisville, Texas, lender has cracked the top five with $48 billion in Ginnie servicing. Other top 15 nonbank servicers include PennyMac Loan Services, Calabasas, Calif., Freedom Home Mortgage, Mount Laurel, N.J., and Lakeview Loan Servicing, Coral Gables, Fla.

Looking at the top 15 as a whole, they had $1 trillion in Ginnie Maes at the end of the third quarter of this year, up 7% from last year. Ginnie Mae securities are backed by loans made by the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service.

Looking at the top 15 overall servicers for the same period, volume was exactly flat from 2012 to 2013, at $9.8 trillion. Wells saw its volume slip, but just by 2%, to $1.8 trillion, but maintained a comfortable lead over Iselin, N.J.-based Chase, which was down 2% to $1 trillion.

Bank of America remained third overall, but saw its volume drop 39% to $890 billion. The big three together control about $3.8 billion in servicing, around 40% of the whole, still a hefty amount of the total but down dramatically since the housing crash of 2008. On June 30, 2008, the three held $5.2 billion in servicing and held 54% of the total.

The big three are also hearing the sound of nonbanks charging up the ranks of overall servicers. Nationstar, Ocwen and Walter Investment Management, Tampa, are all in the top ten.

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