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Article: The 2005 Cost of Servicing Study: with fewer new loans flooding into portfolios and old ones not flying out as fast, servicing posted a turnaround in 2004. The latest Mortgage Bankers Association cost study shows direct costs down, productivity up and net operating profit higher as well. Even losses from impairment and amortization only barely took net financial income into negative territory.(SERVICING)
- Article from:
- Mortgage Banking
- Article date:
- September 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 Mortgage Bankers Association of America. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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IT WAS JUST A YEAR AGO THAT WE PONDERED whether and when servicing would generate a financial profit again--or at least improve from the abysmal levels of 2001-2003. With mortgage servicing right (MSR) amortization and write-downs washing away operating profits, the outlook for the business looked rather bleak. Then, it happened: After three consecutive years of escalating expenses, declining productivity and worsening net financial losses, a servicing turn around was apparent in 2004.
Based on results from the latest Mortgage Bankers Association (MBA) Cost of Servicing Study (COSS), servicers were closer to breaking even in 2004, due to fewer loan setups and ...