Fannie Mae (FNMA)

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Agency Servicing Continued to Grow in 3Q17, Megabanks Show Little Interest

By John Bancroft ... [e-mail]

IMFnews ... Thursday, Oct 19, 2017



The universe of servicing single-family home loans for Fannie Mae, Freddie Mac and Ginnie continued to expand during the third quarter, but a handful of large banks wanted nothing to do with it.

The three agencies had a combined $6.378 trillion of single-family mortgage-backed securities outstanding at the end of September, up 1.9 percent from the midway point in the year, according to a new Inside Mortgage Finance analysis of agency MBS disclosures. All three agencies saw increases in outstanding MBS, with Ginnie (up 2.2 percent) and Fannie (up 2.1 percent) posting the biggest gains.

Servicing tends to grow fastest in markets that feature purchase-mortgage lending, and that’s been the case over the past six months. Purchase loans accounted for 65.2 percent of agency MBS activity during the third quarter, and volume was up 21.5 percent from the previous period.

The four largest banks in the U.S. – Wells Fargo, JPMorgan Chase, Bank of America and Citicorp – continued to pare back their agency servicing exposure. The four reduced their agency mortgage servicing rights by $59.56 billion during 3Q17, with over half of that amount ($32.73 billion) at Citi.