In the past five years there has been a monumental shift in
mortgage loan servicing. Bank servicing
subsidiaries, which once dominated in the market, no longer even constitute a
majority of companies servicing Ginnie Mae mortgage loans. In an article in the CoreLogic Insights blog Faith Schwartz CoreLogic’s
senior vice president of Government Solutions, takes
a look at how and why depository institutions have been releasing their
servicing rights and what the implications may be for investors and consumers.
Schwartz says that
seven years after the collapse of the housing market and after many many
changes to regulations affecting mortgage originations, the face of those
originations have changed and this is also having an effect on loan servicing. This trend of transferring servicing from
banks to non-bank servicers, she says, can most likely to attributed to a
combination of regulatory changes,
reputational risks and basic economics.