Mortgage production fell at Downey Financial Corp. , but so did losses. Delinquency, however, continued its meteoric rise.
Residential originations were $0.7 billion during the third quarter, down from $1.0 billion in the second quarter, the struggling firm reported today. Business was slightly better, however, than $0.7 billion in the third-quarter 2007.
From January through September, originations were $2.3 billion.
The company's wholesale business was shut down last week, impacting around 200 employees.
Downey serviced $5.3 billion in loans for other parties, falling from $5.4 billion in the second quarter.
Loans held for investment were 11.0 billion on Sept. 30, including $5.7 billion in negative-amortization adjustable-rate mortgages. The mortgage investment portfolio was mostly unchanged from three months earlier.
Loan delinquency of at least 30 days reached 12.41 percent on Sept. 30, climbing from 11.21 percent on June 30.
Downey said it modified $157 million in loans during the most recent quarter at current market rates, while $150 million were modified at below market rates.
Net income at the Newport Beach, Calif.-based firm was an $81 million loss, better than the $219 million second-quarter loss but worse than the $23 million loss a year earlier. Earnings reflected a $49 million increase in credit loss provisions.