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39 » VISIT US ONLINE @ DSNEWS.COM SMALLER BANKS PICKED UP RMBS SLACK IN Q3 2017 e third quarter of 2017 saw many of the larger bank servicers scaling back their portfolios of residential mortgage-backed securities (RMBS), while smaller regional banks and non bank servicers moved to seize the opportunity, as reported by Fitch Ratings' latest RMBS servicer handbook. According to Fitch, portfolios for the top bank servicers decreased by 1.6 percent during Q 3 2017. ese bank servicers include Wells Fargo, JPMorgan Chase Bank, Bank of America, and CitiMortgage Inc. Fitch also points out that Wells Fargo's portfolio will also get a bump from their September 2017 purchase of servicing rights from Seneca Mortgage Servicing, for which Wells Fargo paid $51 million. Among smaller regional bank servicers, Flagstar led the pack for portfolio growth in Q 3, jumping up 4.7 percent. Just behind it was HomeStreet Bank (+4.4 percent), First Republic Bank (+3.6 percent), and PNC Mortgage Services (+2.2 percent). Fitch reports that Nationstar Mortgage/ Mr. Cooper grew by 7.6 percent, topping out at $494 billion in Q 3. Of the 17 non bank servicers Fitch rated during Q 3 2017, 14 of them grew during the quarter, "by an aggregate of 6.3 percent." Of course, it wasn't growth all around. Per Fitch's RMBS data, Ocwen Loan Servicing saw its portfolio shrink to $181.6 billion during Q 3, a drop of 3.9 percent. BSI Financial Services Inc.'s portfolio decreased by $1.2 billion to a total of $7.1 billion, and Statebridge Company's portfolio totaled $1.9 million for Q 3, a decrease of $70 million. Fitch releases its U.S. RMBS Servicer Handbook every quarter. e Handbook includes "a description of all Fitch-rated servicers, their current servicer ratings and key rating drivers, portfolio size and key attributes, important trends, links to the full RMBS servicer reports, and Fitch analyst contact information." HOME MORTGAGE DISCLOSURE ACT RULES, DATA SECURITY TOP CONCERNS FOR BANKS Banks and credit unions are markedly more worried about regulatory compliance and risk management, according to new data. e results of the Wolters Kluwer Regulatory and Risk Management Indicator revealed that overall risk management concern is up 13 percent over the year. Regulatory concerns are up 3 percent for the same period. According to the Indicator, which polled more than 600 banks and credit unions across the country, top regulatory concerns include the fair lending exam, new Home Mortgage Disclosure Act rules, and the ability to track, maintain, and report to regulators. Just under 50 percent of respondents said they've noticed increased scrutiny based on their most recent fair lending exam, while HMDA changes came in as the single-biggest concern across the board. As for risk management, cybersecurity and data security topped the list, with a whopping 83 percent of those surveyed saying they're either "concerned" or "very concerned." IT risk and regulatory risk also came in high. According to Timothy R. Burniston, Senior Adviser and Principal Regulatory Strategist at Wolters Kluwer, 2017's many data breaches are likely to blame. "ese results—compiled against a backdrop of highly publicized data breaches at well-known entities, and at a time when financial institutions are preparing for the implementation of the most significant set of HMDA changes in several decades—drove the increase in concerns expressed in this year's survey," Burniston said. On the compliance front, respondents were mostly concerned with optimizing their compliance spend, reducing exposure to financial crime, and managing their compliance monitoring and testing efforts. "ese responses, when viewed collectively, reinforce for financial institutions the strategic imperative of having a proactive, well-staffed and supported corporate compliance program that operates across the three lines of defense —the business units, along with compliance/risk and audit areas—in tandem with an overarching risk management framework integrated with all lines of business," Burniston said. DS News is the only publication in the country solely dedicated to providing default servicing professionals with news and content focused on their industry. SUBSCRIBE TO THE LEADER IN DEFAULT SERVICING NEWS SUBSCRIBE NOW! Call 214.525.6700 or connect with us online at DSNews.com.