The mortgage servicing business is seeing growing consolidation, especially in the second tier of market participants. Mergers, MSR sales and subservicing continue to reshape the market.
Compliance relief is one of the major benefits that leads owners of mortgage servicing rights to use subservicers, including some of the largest MSR investors in the market.
Following seasonal patterns, the number of FHA and VA loans in early stages of delinquency fell sharply from the fourth quarter of 2018 to early 2019. Nonbanks continued to expand their footprint, accounting for 62.2% of outstanding Ginnie single-family servicing.
New Ginnie Mae mortgage-backed securities volume in the first quarter of 2019 declined to the lowest level in nearly five years. Total single-family MBS production fell 15.7% sequentially to $76.97 billion.
Liquidity problems may be a major driver of increased merger and acquisition activity in 2019. Although bulk MSR buyers may be taking a pause to parse interest-rate trends, volume is expected to be strong this year.