A funny thing happened on the way to the mortgage correction: while residential debt outstanding has been declining steadily for well over a year, subservicing contracts have increased – handsomely.

According to survey figures compiled by ASR sister publication National Mortgage News (NMN) and the Quarterly Data Report (QDR), the nation's subservicers were processing $386 billion of loans at Sept. 30, a 20% increase from the same period a year earlier.

And it's no secret where the growth in these contracts is coming from: Fannie Mae and Freddie Mac, which increasingly are seizing portfolios and “force-placing” them with firms such as Nationstar, Green Tree Servicing, and Seterus, the latter of which is controlled by International Business Machines.

In at least one case, a GSE (Fannie Mae) has actually bought MSRs, while outsourcing the processing to a third-party vendor.

According to NMN/QDR, Cenlar of Ewing, N.J., ranked first among all subservicers at Sept. 30 with $81 billion of contracts on its books.

Dovenmuehle ranked second with $62 billion, and Nationstar Mortgage third with $56 billion. (For the complete ranking and full story see the weekly edition of NMN.)

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