How Large Is The Mortgage Servicing Portfolio Of The Largest U.S. Banks In The Country?

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The five largest U.S. banks serviced more than $3.5 trillion in outstanding mortgages in the U.S. at the end of Q3 2016.

CB_QA_MortgageServ_16Q3

The table above captures the break-up of total mortgages serviced by each of these banks in terms of ownership. In addition to servicing mortgages that they originate and continue to hold on their balance sheet, each of these banks also service a sizable portfolio of third-party mortgages. As detailed here, third-party mortgages make up almost $2.6 trillion of the $3.5 trillion in total mortgages serviced by these 5 banks – 72% of the total portfolio.

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Notably, extrapolating data compiled by the New York Fed would indicate that there were around $8.9 trillion in outstanding mortgages in the U.S. at the end of Q3 2016. This would imply that the 5 largest banks service 40% of all outstanding mortgages in the U.S. However, these banks have seen a notable reduction in their total mortgage servicing portfolio over recent years, as the figure has fallen from over $3.8 trillion at the end of Q3 2015 to below $3.6 trillion now – a year-on-year reduction of 7%. This is because stricter regulatory requirements since the economic downturn have made the mortgage servicing business less profitable – resulting in banks running off their third-party mortgage servicing portfolios.

CB_QA_MortgageServChange_16Q3

The regional banking giant U.S. Bancorp stands out as the only major bank to witness an increase in its mortgage servicing portfolio. The chart below captures U.S. Bancorp’s third-party mortgage servicing portfolio over the years, and also includes our forecast for it. You can see how changes to this portfolio affects our price estimate for the bank by modifying this chart.

See the links below for more information about the 5 largest U.S. commercial banks:

See full Trefis analysis for U.S. Bancorp | Wells Fargo | JPMorganBank of America | Citigroup

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