Cenlar, a thrift in Trenton, N.J., has leapfrogged over Dovenmuehle Mortgage Inc. of Lake Zurich, Ill., to become the nation's largest home loan subservicer thanks in part to a new contract with Freddie Mac.

Dave Miller, a senior vice president at the $592 million-asset Cenlar, said it has benefited from the government-sponsored enterprises' efforts to have mortgage bankers of all sizes retain servicing rights so they have "more skin in the game." Many small and midsize nonbanks and depositories are opting to use a subservicer to do the work instead of building the infrastructure themselves. "Some mortgage bankers used to sell everything they originated 100% servicing-released, but that's changing," he said.

Also, lenders have complained about the poor premium they receive for servicing rights when they sell their loans to aggregators.

At midyear Cenlar ranked third among all subservicers, with $46 billion of contracts, but its business spiked to $93 billion in the third quarter.

A large chunk of that growth came from 260,000 loans once serviced by Taylor, Bean & Whitaker Mortgage Corp. When Taylor Bean, a nonbank, filed for bankruptcy protection over the summer, Freddie Mac — which controlled the servicing rights on its loans — looked for a subservicer and eventually decided on Cenlar.

Dovenmuehle had ranked first among subservicers for years. At Sept. 30 it had contracts of roughly $70 billion.

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