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Nationstar Mortgage Originations Increase

Although Nationstar Mortgage LLC swung to a huge quarterly loss on mortgage servicing rights valuations, home-loan production improved.

For the first-three months of this year, the Dallas-based company funded $4.2 billion in residential loans.

Business improved from the fourth-quarter 2015, when $4.0 billion in mortgages were closed.

Those details and more were spelled out by parent Nationstar Mortgage Holdings Inc. in its earnings report for the first quarter of this year.

Mortgage production, however, was no different than the $4.2 billion in originations during the first quarter of last year.

Consumer-direct business accounted for $2.9 billion of the latest production.

Refinance share fell to 75 percent in the first-quarter
2016 from 79 percent three months earlier.

The servicing portfolio closed out March 2016 at $386 billion,
less than the $398 billion reported as of the end of last year. But the portfolio has grown from the same date last year, when Nationstar serviced $390 billion.

The 60-day delinquency rate was 6.5 percent as of March 31, 2016, improving 40 basis points from three months earlier
and from 230 BPS from one year earlier.

Mortgages held for investment were trimmed to $0.167 billion from $0.174 billion as of Dec. 31, 2015. Loans on the balance sheet stood at $0.186 billion as of March 31, 2015.

As of March 31, 2016, reverse mortgage interests were $7.584 billion, expanding from $7.514 billion at the end of last year and just $2.634 billion at the same point last year.

Nationstar suffered a whopping $216 million pre-tax loss, swinging from a $121 million fourth-quarter 2015 profit and also worsening from a $74 million first-quarter 2015 loss.

The first-quarter 2016 loss was driven by a $208 million pre-tax loss in the servicing business.

Nationstar said the most-recent quarterly loss was primarily the result of changes in fair value.

“Declining interest rates during the quarter were also the primary cause for the fair value loss on our MSR portfolio which does not consider the value generated by our integrated origination platform,” Nationstar said.

The report added, “MSR economics do not reflect additional value of $600 million.”

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