The worst of the financial crisis is over and the number of foreclosures is down sharply from only a few years ago, yet many of the mortgage firms, however, remain the same — Wells Fargo, Bank of America, JP Morgan Chase & Fannie Mae. The latest rankings, however, now include several smaller firms including Lone Star Funds, Penny Mac, Carrington (some of these firms were not even in existence when the crisis started in 2007).

Many of these newer firms bought soured mortgages at steep discounts and are now looking to profit by restructuring the loan terms and trying to get the borrowers to repay. And generally, the smaller firms have a better ability to modify loans because they are more flexible with less investor requirements. The new smaller firms are taking some risks that bigger banks are no longer interested in taking, but when the homeowner can’t repay the loan or qualify for a modification, the new firms and/or their loan servicers foreclose in more aggressive ways than the older, larger foreclosure firms. Fannie Mae and Freddie Mac are looking to sell thousands of distressed mortgages within the next year or two, and while the large banks still own the majority of these mortgages, count on the smaller firms to continue to catch up to them.