A surge in gains on mortgage servicing rights significantly lifted Stonegate Mortgage Corp.’s income. But home lending slowed and will fall further.
From Oct. 1, 2016, through the end of last year, the Indianapolis-based mortgage banking firm earned $37 million before income tax expense.
The results, in addition to other financial and operational metrics, were presented in Stonegate’s earnings report for the fourth-quarter of 2016.
Income more than doubled from the previous three-month period, when $16 million was earned, and skyrocketed from $3 million earned in the same quarter in the previous year.
The dramatic improvement in earnings was driven by gains in MSR valuation, which soared to $36 million in the latest period from $5 million the prior quarter and $4 million a year prior.
Residential loan production during the three months ended Dec. 31, 2016, came in at $2.457 billion. Business was off from
10,853 units originated for $2.621 billion in the third quarter but slightly better than the downwardly revised $2.272 billion in volume during the final quarter of 2015.
Fourth-quarter 2016 volume consisted of $0.322 billion in retail originations, $0.560 billion in wholesale lending and $1.575 billion in correspondent acquisitions.
For all of last year, mortgage lending amounted to
$9.363 billion, retreating from a downwardly revised $11.238 billion during 2015.
New business during the first-three months of this year is poised to tumble based on mortgage loans locked, which sank to $2.1 billion in the final quarter of 2016 from $3.6 billion in the previous three-month period.
As of year-end 2016, Stonegate serviced $16.287 billion in home loans. The servicing portfolio
grew from Sept. 30, 2016, when there 75,762 loans serviced for $14.417 billion. But the portfolio was reduced from 90,408 loans serviced for $17.521 billion as of Dec. 31, 2015.
Stonegate reported $0.126 billion in warehouse lending receivables at the conclusion of 2016. The asset
was reduced from $0.168 billion three months earlier and $0.199 billion one year earlier.
