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Nationstar Expanding

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Nationstar Mortgage Holdings Inc. reported record originations, grew its mortgage servicing portfolio and expanded its workforce. Thanks to the acquisition of another lender as well as the purchase of additional mortgage servicing rights — the outlook is for further growth.

The first quarter brought $3.4 billion in total home loan originations for the Lewisville, Texas-based company.

Around $0.3 billion of first-quarter business was generated through the correspondent channel. Nationstar says that correspondent originations are a way to selectively acquire servicing assets at attractive prices.

Another $1.8 billion of first-quarter volume was originated for the Home Affordable Refinance Program. Nationstar sees further HARP activity this year as a result of its acquisition of MSRs from Bank of America — which doubled the number of HARP-eligible loans now serviced by Nationstar.

Overall business was better than in the fourth-quarter 2012, when mortgage production amounted to $3.1 billion.

Nationstar nearly tripled its volume from the first-quarter 2012, when just $1.2 billion was originated.

It was the fourth consecutive quarter of record originations.

The second quarter is on track to see even more originations — with the total application pipeline growing 17 percent from the fourth quarter to $7.8 billion and the locked pipeline expanding 29 percent to $6.4 billion.

“Nationstar now expects origination volume of $23 billion in 2013,” the report stated.

Following the acquisition of MSRs on $22 billion in loans during the most recent period, Nationstar’s servicing portfolio finished March at $312 billion.

Three months earlier, the servicing portfolio was $208 billion, and the year-earlier total was $103 billion.

Factoring in second-quarter MSR acquisitions, the pro-forma servicing portfolio is around $435 billion.

“Nationstar continues to evaluate a pipeline of bulk MSR purchase opportunities in excess of $300 billion in aggregate UPB,” the report said. “Nationstar has executed on flow agreements that are expected to produce $15 billion in annual volume, with flow servicing annual potential in excess of $50 billion as the program grows with additional clients.”

Mortgages held for investment finished March at $0.236 billion, off from $0.239 billion at the end of December and $0.241 billion at the same point in 2012.

Delinquency of at least 60 days was 13.8 percent as of March 31. The rate improved from 15.3 percent as of Dec. 31, 2012.

Pre-tax income from originations fell to $68 million from the fourth quarter’s $82 million. But mortgage originations brought in more income than the $42 million in the first-quarter 2012.

Income before taxes for all of Nationstar Holdings climbed to $101 million from $94 million three months earlier and $53 million a year earlier.

The acquisition of MSRs from Bank of America prompted the hiring of 1,000 employees and contractors.

Nationstar’s staff size has climbed to 5,400 employees from an estimated 4,700 as of the end of 2012.

Nationstar said it agreed this month to the strategic acquisition of Greenlight Financial Services for $75 million.. The direct-to-consumer originator is expected to give Nationstar another profitable lending channel for servicing asset generation. The acquisition is expected to close in the second quarter.

Irvine, Calif.-based Greenlight, which has more than 700 employees, is expected to originate more than $8 billion a year for Nationstar.

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