The nation’s four largest residential servicers – with the exception of Wells Fargo – took large writedowns on the asset value of their residential servicing portfolios in the first quarter, according to an analysis done by ASR sister publication National Mortgage News (NMN).
Citigroup, the nation’s fourth largest servicer, led the pack, marking down the asset value of its MSRs by 27% to $4.69 billion. (The comparison is to the same period a year earlier.)
Bank of America, which continues to deal with Countrywide’s troubled mortgage unit and MSRs, wrote down the asset value of its portfolio by almost 19%. JPMorgan Chase’s mark down totaled almost 16%.
Wells actually increased the value of its MSRs by just under 1%, NMN found.
The writedowns reflect historically high delinquencies, increasing servicing costs due to consent orders and compliance mandates, and worries about coming regulatory rules that cap how much MSRs can count toward bank equity. (For a complete analysis see the Monday, May 9 edition of NMN.)