Servicing remains stable despite slowdown in the mortgage industry
Wells Fargo Home Mortgage’s (WFHM) servicing portfolio inched down from the previous year, but the banking giant remained the biggest mortgage servicer in the country, according to a recent report from Moody’s.
WFHM’s servicing portfolio totaled 7,000,906 loans for an unpaid principal balance of nearly $1.17 trillion.
Most of the unpaid principal balance of its servicing portfolio was in California (17%), Texas (7.8%), Florida (5.6%), and New York (5.2%). Other states do not account for more than 5% by loan account, according to Moody’s.
The report suggested that the servicer’s focus on automation through technology and process enhancements was one of its strongest features, along with its senior management team.
“WFHM maintains a solid technology platform in both customer service and collections,” Moody’s wrote. “Since our prior review, the company continued its expansion of alternative borrower contact strategies such as secure chat, texting, and email.”
However, the cooldown in the mortgage industry has taken a slight toll on the bank.
“Wells Fargo's mortgage banking division (which is a part of community banking) continues to bear the brunt of the slowdown in the mortgage industry, and has reported a steady decline in revenues for several quarters now,” analytics firm Trefis wrote. “The cornerstone mortgage business saw revenues fall 24% year-on-year in Q1, and we don't think things are likely to improve much in Q2. However, the U.S. mortgage industry is expected to turn the corner over the latter half of the year, and should help boost Wells Fargo's mortgage banking fees.”
