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Mortgage services employed by banks are in greater risk of losing their jobs than their non-bank counterparts, according to the latest quarterly U.S. RMBS Servicer Handbook issued by Fitch Ratings.
The average number of full-time mortgage servicing employees at banks has plummeted to approximately 4,000 from approximately 8,000 two years ago, with the shrinkage blamed on declines in portfolio sizes and improving loan performance. In comparison, the number of nonbank mortgage servicing employees during the same period has remained fairly stable—approximately 2,000—as nonbanks focus on servicing growth while dealing with borrowers that generally still require more assistance and input from servicers.
Fitch also reported that banks have been more active in offering repayment plans than nonbanks, while nonbanks make a greater use of loan modifications for loss mitigation than banks. Short sales were used in approximately 14 percent of bank loss mitigations and 19 percent of non-bank loss mitigations as of the second quarter, Fitch added.