Top 100 Servicers: More Independents, Fewer S&Ls

More independent mortgage companies joined the ranks of the the top 100 servicers last year, and they did so at the expense of thrifts.

In 1995, 31 of the 100 largest servicers were thrifts. Last year, only 18 thrifts were among the top 100. There were 44 independent mortgage companies on the list, 20 more than the year before, according to figures compiled by National Mortgage News, an American Banker affiliate.

Mortgage companies not affiliated with banks or thrifts serviced $837 billion, a 20% increase. The thrifts serviced $269 billion, a 12% increase.

The 36 commercial banks on the list serviced nearly $1.2 trillion, 26% more than in 1995.

Overall, the top 100 servicers saw the dollar amount of loans in their portfolios increase 22% from 1995. They serviced nearly $2.3 trillion last year, about 61% of total outstanding mortgage loans.

The larger servicers grew in 1996 mainly through bank mergers and acquisitions of servicing portfolios. Norwest Mortgage Inc., which was the third-largest servicer in 1995, became the largest servicer by virtue of its acquisition of Prudential Home Mortgage's servicing. Norwest now services $214 billion. This figure includes about $40 billion in jumbo loans that Norwest subservices for Prudential.

Chase Manhattan Mortgage and NationsBanc Mortgage saw increases in servicing fueled by acquisitions their parent companies made last year. Chase Manhattan Corp. merged with Chemical Banking Corp., while NationsBank Corp. bought Boatmen's Bancshares.

A new mortgage giant was created from the mortgage companies of two banks. HomeSide Lending, the seventh-largest servicer, combines the servicing portfolios of the mortgage units of Bank of Boston Corp. and Barnett Banks Inc.

And consolidation is continuing. Already this year, Source One Mortgage Services sold $17 billion in servicing to Chase. Temple Inland Mortgage, the 30th-largest servicer, is acquiring Knutson Mortgage and its $7 billion in servicing.

Robert N. Husted Jr., principal of New York-based MIAC Risk Management Services, said there should be even more consolidation of servicing among the thrifts since thrifts are finding it difficult to compete against larger banks.

At least one more big thrift could exit the top 100 by the end of this year. The $46 billion servicing portfolio of Great Western Financial Corp. is still up for grabs as H.F. Ahmanson & Co. and Washington Mutual Inc. continue their efforts to buy the Chatsworth, Calif.-based thrift.

More subprime lenders joined the upper echelon of servicers as well. Ford's Associates First unit, Advanta Mortgage, Contimortgage and United Companies Financial all were among the top 100 servicers last year. None of them made the list in 1995.

Subprime lenders made strong gains on the originations side as well. Money Store, Amresco Residential Capital Markets and IMC Mortgage were among the subprime companies that were not on the list in 1995.

Overall origination volume for the top 100 mortgage producers was $509 billion, a 40% increase from 1995. Norwest was the largest originator, with volume of $51.5 billion.

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