For two years the outstanding dollar amount of U.S. mortgage debt — in other words, mortgage servicing rights — has been falling steadily in the wake of the nation’s housing crisis. But it appears the 24-month slide has officially ended.
According to exclusive survey figures compiled by ASR sister publication National Mortgage News and the Quarterly Data Report, servicing balances totaled $9.19 trillion at June 30, compared to $8.9 trillion at March 31. In total, residential servicers nationwide added $290 billion of consumer debt to their portfolios.
The turn around in MSRs cannot be understated. It indicates that home values are rising and that new home purchase transactions are beginning to pick up steam — but slowly.
An analysis by mortgagestats.com found that U.S. housing debt peaked at $10.1 trillion at year end 2009. (At one time mortgage debt even surpassed Treasury debt, which now stands at $16 trillion.)
As far as servicing balances are concerned, Wells Fargo ranked first at June 30 with $1.86 trillion of MSR contracts, followed by Bank of America ($1.59 trillion) and Chase ($1.07 trillion.) Wells was the only one of the three to show a gain—albeit small at 3%.
BofA’s MSRs fell by 20%, Chase’s by 9%. Both megabanks have been net sellers of servicing rights the past year.