Quarterly lending was slower, the residential servicing portfolio was smaller and losses persisted at PHH Mortgage — though annual originations improved.
For the final three months of 2015, PHH generated 20,825 mortgage closings for $8.842 billion. Business descended from the third quarter’s 25,383 units for $10.337 billion.
The results were published by the lender’s Mount Laurel, New Jersey-based parent, PHH Corp., in its fourth-quarter 2015 earnings results report.
Residential loan production also worsened from the final quarter of 2014, a period that saw 23,533 loans funded for $9.398 billion.
Full-year 2015 originations amounted to 97,214 home loans closed for $40.604 billion. Annual activity expanded from 94,176 mortgages originated for $35.961 billion during all of 2014.
Private-label lending contributed $6.900 billion to the most-recent quarterly volume, while $1.634 billion came from the retail channel and wholesale-correspondent made up the remaining $0.308 billion.
Refinances accounted for just over half of all of last year’s lending.
Applications dropped 16 percent from the third quarter to $10.2 billion, and interest rate lock commitments tumbled by nearly a third to $1.2 billion in the fourth-quarter 2015. The combined weaker metrics, which PHH called “seasonal,” point to a possible drop in first-quarter 2016 production.
PHH serviced 642,379 residential loans for $99.869 billion as of Dec. 31, 2015.
The mortgage
servicing portfolio — which had a weighted-average interest rate of 4.1 percent — was reduced from 658,051 loans for $102.945 billion as of three months prior and 712,643 loans for $113.849 billion as of a year prior.
PHH said its servicing business experienced “slower prepayment speeds and lower-core amortization.”
Excluding foreclosures and real estate owned, the 30-day delinquency rate was 2.47 percent, improving from the 2.56 percent rate as of Sept. 30, 2015.
At the end of 2014, residential delinquency of at least 30 days was 3.01 percent.
The parent reported an $83 million loss from continuing operations before income taxes, not quite as bad as the $87 million loss experienced in the third quarter. But it was worse than the $41 million loss in the fourth-quarter 2014.
“Global economic and domestic regulatory conditions continue to be dynamic, and while we are expecting a smaller originations market and lower margins, the ultimate impact on the mortgage market in 2016 remains uncertain,” PHH Corp. President and Chief Executive Officer Glen A. Messina said in the report. “Assuming we achieve our cost, volume and other business objectives, and the market unfolds as forecast, we expect core earnings before notable items to be breakeven to modestly profitable for 2016.”
