Deutsche Bank ranked the top mortgage servicers in the US based on short sale timelines, and of all prime mortgage servicers, GMAC grabbed the top spot by completing the transactions in six months.
With short sales growing in demand from both distressed borrowers and banks, Deutsche Bank published a “recovery score” today, examining the speed at which the servicers conducted a short sale and the percentage these transactions take of overall property dispositions over the last year.
Servicers received a higher recovery score the more they increased the amount of principal recovered from the disposition of the property while decreasing the amount of time it took to do so. According to Deutsche Bank, a short sale generated a higher recovery score than an REO sale.
The servicers are broken down into four categories based on loan type.
For prime mortgage servicers, GMAC conducted short sales the fastest, averaging roughly six months per transaction. Also, 53% of their dispositions were short sales. It had a recovery score of 59.3.
The next fastest servicer was Citigroup’s servicing arm CitiMortgage, which did a short sale in about seven and a half months, and 56% of dispositions were short sales for a recovery score of 54.4.
Third, was Wells Fargo, conducting short sales in roughly eight months for 34% of its total dispositions. It had a higher recovery score than Citi, however, at 55.6.
Countrywide, acquired by Bank of America, had the slowest short sale timeline. It took more than 13 months on average to conduct a short sale there. BofA took more than 11 months, but 59% of its dispositions were short sales. BofA had the lowest recovery score at 45.5.
For subprime mortgage servicers, Wells Fargo had the shortest short sale timeline at more than 15 months. It conducted short sales, though, on 14% of these loans for a 29.2 recovery score.
HomEq Servicing followed Wells, conducting short sales in 16 months for 22% of its dispositions and a score of 27.4.
Saxon Mortgage Services, the servicing arm of Morgan Stanley, had the third shortest timeline at a little more than 17 months. Saxon conducted short sales 18% of its properties for a recovery score of 23.8.
The slowest was Equicredit, which took an average of more than 29 months to complete a short sale on 41% of its dispositions for a 19.4 recovery score. Ocwen was close behind, also average more than 29 months per short sale. But Ocwen had the highest recovery score of the top subprime servicers at 31.
Of the top option-adjustable rate mortgage (ARM) servicers, EMC Mortgage, owned by JPMorgan Chase, had the lowest short sale time line at just over eight months on 43% of its dispositions. However, it did not recovery as much of the principal and had the lowest recovery score at 32.1.
The next fastest short sale timeline was Aurora Loan Services, at 10 months on 30% of its dispositions for a 35.1 recovery score.
GMAC was third, taking a bit more than 10 months for short sales on 33% of its dispositions of Option-ARM loans. Its recovery score was 34.9.
Countrywide, again, had the longest short sale timeline at almost 14 months on 22% of its dispositions. But it recovered more principal and held a higher recovery score at 38.7.
For companies servicing Alternative-A mortgage loans, First Horizon had the quickest short sale time line at just over nine months on 35% of its dispositions. They also had the highest recovery score of the top Alt-A servicers at 43.1.
Both Wells Fargo and Aurora took around 11 months on short sales for Alt-A loans. Wells did them on 17% of its disposition with a recovery score of 42. Aurora did short sales on 16% of its dispositions for a 37.2 recovery score.
Countrywide, again, took the longest at more than 13 months per short sale on 24% of its dispositions. Its recovery score, however, ranked fifth of the top Alt-A servicers at 39.7.
Write to Jon Prior.