American Home Mortgage Investment Corp.'s chief said soaring production may ease, but margins may fatten.

Milestone fundings of $13.7 billion in the third quarter improved from the prior quarter's $10.8 billion and soared from $5.3 billion total a year ago, according to American Home's earnings announcement Wednesday.

The Melville, N.Y.-based lender said its market share of national originations reached a record 1.81%.

Refinances accounted for 46% of the latest volume, American Home said, while adjustable-rate mortgages represented 48%.

The real estate investment trust's pipeline of applications was reported at $11.6 billion as of the end of the third quarter, nearly $1 billion higher than in the previous period.

The loan servicing portfolio reportedly rose $2.8 billion to $27.5 billion as of Sept. 30. The weighted average note rate was 5.73%, according to the announcement.

American Home said the record loan production drove net earnings of $53.2 million, but the total dropped approximately 19% from the second quarter as it reflected a $34 million write-down primarily associated with "changes in prepayment speed assumptions used by residual asset buyers."

Commenting on its outlook for the fourth quarter and 2006, American Home Chief Executive Michael Strauss said he believes "net interest income and servicing results are likely to improve in coming quarters, but I also expect our loan production will decline in response to rising interest rates and our tax expense will increase due to greater profitability in our taxable REIT subsidiaries."