Both quarterly and annual mortgage originations retreated at PennyMac Financial Services Inc. The company’s servicing portfolio, however, moved higher and is poised for further growth.
Home loan production at the Moorpark, Calif.-based company finished the fourth quarter at $7.958 billion, according to earnings data.
Business declined from the third quarter, when $8.582 billion was funded.
But activity increased from the fourth-quarter 2013, when originations were $5.984 billion.
From Jan. 1 through Dec. 31 of last year, PennyMac closed
$29.073 billion in home loans, down from $31.664 billion in 2013.
Correspondent acquisitions accounted for $7.276 billion of fourth-quarter 2014 activity, and $0.682 billion came from the consumer-direct channel. Much of the consumer-direct production was generated from the company’s existing servicing portfolio.
PennyMac said it has a 7 percent market share of the country’s correspondent production. It has relationships with 344 correspondent clients, two more than at the end of the third quarter. It hopes to reach 480 correspondent clients by the end of the year.
Originations during the current quarter might decline from the fourth quarter based on total locks, which fell to $8.9 billion in the fourth-quarter 2014 from $9.4 billion in the prior period.
As of Dec. 31, 2014, the total servicing portfolio was $66.270 billion, climbing from $62.475 billion three months earlier and $45.476 billion a year earlier.
The latest servicing portfolio included $64.7 billion in third-party servicing.
The servicing portfolio will likely be higher in the next report due to an agreement reached for PennyMac to acquire mortgage servicing rights on $20.8 billion in agency loans.
In an investor call, PennyMac
Chairman and Chief Executive Officer Stanford L. Kurland said the company plans to get into small-balance commercial real estate lending. He noted that there are around $160 billion in annual originations in the sector.
Pre-tax income was $53 million, falling from the third quarter’s $63 million. Income improved, however, from $42 million in the fourth-quarter 2013.
More than 1,800 people were on staff as of year-end 2014.
Headcount increased by 200 from three months earlier and by 500 from twelve months earlier.
