Wednesday, February 03, 2016 1:08:32 PM
KBRA Director: ‘Top Four’ Banks Will Exit Residential Lending or ‘Down Size’
By Brandon Ivey
bivey@imfpubs.com
Over the next several years, thanks to excessive regulation and interest rate issues, the nation’s four largest commercial banks may exit the business of residential lending and servicing entirely, or at the very least, downsize their presence, according to a bold new prediction from Christopher Whalen, a senior managing director at Kroll Bond Rating Agency.
In a speech this week, Whalen – a Wall Street veteran who has been vocal on many mortgage issues – noted that the cost of servicing alone has increased “several fold” since 2008, further pressuring mortgage banking income at depositories.
“The combination of rising mortgage origination and servicing costs, and falling lending volumes, translates into modest risk adjusted returns, a fact which is convincing many banks large and small to exit the residential mortgage market entirely,” Whalen said.
The former Bear Stearns executive named just one of the four megabanks in his speech: Wells Fargo. Presumably, the others include JPMorgan Chase, Bank of America and Citigroup.
According to figures compiled by Inside Mortgage Finance, these institutions rank first, second, third and fifth among residential servicers. Their production rankings are somewhat different, with Wells and JPM ranking first and second, respectively.
FEATURED Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • Sep 24, 2024 8:50 AM
FEATURED Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM