Wells Fargo did more to outpace its closest competitor in servicing for income-producing mortgages in 2024, according to the Mortgage Bankers Association.
The megabank took the top spot in the rankings with $646 billion in servicing. Its number compares to $584 million for PNC Real Estate/Midland Loan Services. In 2023, Wells had ended the year with $669 billion and PNC came close to matching that number at $646 billion.
The widening of Wells Fargo’s lead in 2024, which the MBA announced at its annual commercial and multifamily conference in San Diego, may reflect a renewed interest in building market share. Well has had some regulatory constraints to this which are being rolled back.
Wells Fargo Chief Financial Officer Michael Santomassimo said during an investor call Tuesday that the company plans to grow commercial banking “in a disciplined way over time.”
However, what happens to its position in the coming year remains to be seen. Wells has said it plans to close on the sale of its third-party non-agency commercial mortgage servicing business to Trimont early this year.
Other companies ranking in the top five based on primary and master servicing retained their respective positions, starting with KeyBank National Association at $478 billion, followed by CBRE Loan Services and Berkadia Commercial Mortgage LLC, which had respective volumes of $432 billion and $417 billion. KeyBank’s comparable volume last year was $465 billion; CBRE’s was $410 billion and Berkadia’s was $405 billion.
The rankings shed light on the pivotal roles servicers play in the commercial and multifamily mortgage industry. Primary servicers are responsible for collecting loan payments, conducting property inspections, and overseeing other property-related activities. Master servicers collect cash and data from primary servicers and facilitate the distribution of these to investors through trustees.
The aforementioned top three reprised their positions when it came to the ranking of top players in private securitizations and collateralized debt obligations. But in other categories the mix of top players differed.
When it came to credit company, pension fund, REIT and investment fund loans, PGIM Real Estate was the leader. JLL, NorthMarq, Bellwether Enterprise Real Estate Capital and Berkadia led in life company loans.
Walker & Dunlop, Berkadia and CBRE led in loans sold to government-sponsored enterprise Fannie Mae; while KeyBank, Wells and PNC/Midland topped the list at Freddie Mae.
Lument Real Estate Capital Holdings, Greystone, Berkadia and Walker & Dunlop were the top servicers of Federal Housing Administration loans and other government-backed products in Ginnie Mae guaranteed securitizations.
KeyBank and CWCapital Asset Management led the list of servicers that specialize in handling distressed mortgages.
Loan performance in the commercial and multifamily sector has been mixed, according to the fourth-quarter survey MBA released late last month.
Out of all the capital sources, commercial mortgage-backed securities had the highest 30-day delinquency rate in the period at 5.3%. This was up from 4.8% the previous quarter.
Other capital sources like life companies, the GSEs and FHA multifamily and healthcare loans had delinquency rates of just 1% or less.
By property type, the sectors that experienced increased delinquencies in the quarter were office, lodging, retail and multifamily. Industrial delinquencies fell.
“The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy,” MBA Chief Economist Mike Fratantoni said in a press release.
