Falling mortgage rates weren’t enough to help LendingTree Loans match its “unprecedented” refinance production last year, while improving rates actually hurt the mortgage leads business.
LendingTree Loans closed 2,800 loans for $0.6 billion in the first quarter, Tree.com Inc. reported today.
Volume was barely changed from 2,700 closings for $0.6 billion the prior quarter. But production dropped from the second-quarter 2009 — when 4,000 mortgages for $0.9 billion were originated.
Matched requests at the exchanges segment tumbled to 271,100 from the first-quarter’s 337,100. The decline was attributed to low interest rates that have decreased demand for mortgage leads. A year ago, quarterly matched requests were 333,200.
The company reported 8,400 exchange segment closings for $1.5 billion, lower than 9,100 closings in the first quarter for $1.7 billion. Volume in the second quarter of last year was 13,600 closings for $2.8 billion.
Corporate revenues were down 5 percent from the first quarter and a quarter worse than a year ago.
“The year-over-year decrease in revenue is due to fewer matched leads and loan transactions in the LendingTree Loans and Exchanges segments, when compared to the unprecedented refinance activity of second quarter 2009,” the report said.
Earnings before interest, taxes, depreciation and amortization — or EBITDA — was $2.0 million at all of Tree.com, improving from a $2.9 million first-quarter loss. A year earlier the figure was $4.3 million.
“Adjusted EBITDA decreased $4.8 million year-over-year, reflecting both lower revenue and the return to normalized levels of advertising spend in second quarter 2010 compared to the prior year, when we significantly curtailed marketing spend and achieved higher revenue because of a market driven surge in refinance activity,” the Charlotte, N.C.-based company stated.
But Tree.com Chairman and Chief Executive Officer Dough Lebda said in the release that both the exchanges and the LendingTree Loans segments reported positive adjusted EBITDA.
