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Nationstar Originations Shrink, Servicing Grows

For the fifth time in a row, quarterly production at Nationstar Mortgage LLC regressed from the preceding three months. While servicing grew, overall profitability was lean.

From Oct. 1 to Dec. 31, residential home loan production reached $3.6 billion, according to fourth-quarter earnings report data provided by parent-company Nationstar Mortgage Holdings Inc.

This activity fell short of the $4.1 billion originated in the third quarter and the $5.5 billion funded during the last three months in 2013.

Consumer direct accounted for $2.5 billion of recent quarterly production totals.

The total application volume of $3.2 billion was shy of the $3.5 billion from the third quarter, but the locked pipeline tally at $2.8 billion rose ahead of the prior period’s $2.4 billion.

In total, loan production for all of last year equaled $16.9 billion, a decline from the $23.8 billion reached a year earlier.

As of Dec. 31, Nationstar serviced $381 billion.

Despite the mortgage servicing portfolio increasing from $378 billion as of Sept. 30, it fell from $391 billion as of the end of 2013.

The company’s investment portfolio showed $0.192 billion in mortgages, a drop down from $0.195 billion at the end of the third quarter and $0.211 billion at the end of the prior year’s fourth quarter.

The balance sheet also included $2.384 billion in reverse mortgage interests, growing from $1.957 billion as of the last day in September and $1.528 billion as of the last day in December 2013.

The 60-day or more delinquency rate trimmed to 9.9 percent from 10.6 in the third quarter. As of Dec. 31, 2013, the delinquency rate was 11.8 percent.

Before taxes, Nationstar earned $32 million during the last three months in 2014. During the same time period a year earlier, the company realized an $86 million loss.

Still, recent profit was much lower than the $110 million earned from the first day in July to the last day in September.

Pre-tax earnings of $286 million for the full year also garnered lower profit than the $346 million posted for 2013.

The earnings report said Nationstar has entered into new commitments to acquire, primarily from two counter-parties, $35 billion of agency servicing assets. The commitments are expected to close in the first quarter.

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