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Volume 18 - Number 24

November 28, 2014

Downloads Available: Mortgage Profitability: Production vs Servicing - 3Q14

Originations Surge Fueled Income Gains In 3Q14, But Servicing Profits Slumped

A sharp drop in net income from servicing operations during the third quarter was the key factor in a decline in overall mortgage-banking profitability for a group of major lenders, according to a new analysis by Inside Mortgage Trends. The 11 publicly traded companies, which include most of the top originators and servicers in the industry, reported a combined $1.25 billion in net income from servicing, including the gains or losses from hedging their mortgage servicing rights. That was down 43.8 percent from the second quarter and was the lowest net income from servicing for the group since the third quarter of last year. Two of the companies reported increased servicing revenue. At Huntington Bank, net servicing income nearly tripled ...

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With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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