Wells Fargo remained the top mortgage servicer in the industry at the end of 2012, but the company posted a rare decline in its portfolio during the fourth quarter and is reportedly considering selling some of its massive $1.873 trillion portfolio. A new Inside Mortgage Finance ranking and analysis of the servicing market underscores the gains made in market share by a handful of nonbanks and some regional banks, while some of the top servicers continue to pare their businesses. The servicing industry faces a significant challenge in that increased regulatory requirements are raising operational costs at a time when the overall market continues to decline. On the upside, much of the damage from the housing recession has already occurred...[Includes one data chart]
Mortgage bankers of all sizes continued to report strong earnings on their mortgage banking operations during the fourth quarter of 2012, but the salad days may be over.
The mortgage banking industrys record level of profitability may have peaked, as gain-on-sale margins have already begun to slip and more dark clouds appear on the horizon, according to industry analysts.