The combined portfolio of the top five servicers actually declined slightly during the third quarter. Megabanks Wells Fargo, Chase and Bank of America shed a combined $26.8 billion during the third quarter, with $20.0 billion of that taking place at Wells. Mr. Cooper Group, the largest nonbank servicer, reported a slight $2.5 billion drop, although its subservicing portfolio grew 2.8% to $310.5 billion.
Prior to being placed into conservatorship in the fall of 2008, it was common for Fannie Mae and Freddie Mac to offer guarantee fee discounts to their largest customers, a situation that put smaller lenders at a disadvantage.
On the revenue front, Fannie took in $5.63 billion during the quarter compared to $5.39 billion in 2Q19. The company booked hedging losses of $713 million during the period, down 5.4% sequentially.
It was the second quarter in a row that Freddie Mac was allowed to keep all of the money it earned as opposed to upstreaming retained capital in excess of $3.0 billion to the U.S. Treasury, the owner of its senior preferred shares.
The majority of expanded-credit MBS this year has been filled with Alt A loans that tend to have higher credit scores and are underwritten with alternative documentation.
RSS