Servicers’ Rapid Growth Poses Danger to GSEs, Watchdog Warns
American Banker - July 1, 2014 - July 1, 2014
July 01, 2014, By Kate Berry
A nonbank mortgage servicer that took on more loans than it could handle ended up delaying payments to Fannie Mae and Freddie Mac, according to a government watchdog report.
The servicer, which the report does not identify by name, used short-term financing to acquire a large portfolio of delinquent loans backed by one or both of the government-sponsored enterprises. This company lacked the infrastructure to handle so many loans, leading to consumer complaints and the payment delays, and limited credit availability threatened the servicer’s ability to fund its operations.
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