Nationstar Earnings Sink on Mark-to-Market Charge

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MORTGAGE EXPERT
5 · 04 · 17

Quarterly originations declined, the servicing portfolio was lower and earnings plummeted on mark-to-market charges at Nationstar Mortgage Holdings Inc.

Prior to income tax expense, Nationstar’s income was
$3 million during the period that began on Jan. 1, 2017, and concluded on March 31.

The Dallas-based mortgage banking firm released the results, in addition to other financial and operational metrics, in its first-quarter 2017 earnings report.

Earnings sank compared to the preceding quarter, when income was $317 million. The quarter-over-quarter deterioration was due to mark-to-market charges, which swung to a $38 million loss from a $290 million gain in the final quarter of last year.

But pre-tax income swung from a $216 million loss in the first quarter of last year.

During the first-three months of this year, Nationstar originated $4.632 billion in residential loans. Business retreated
from the fourth-quarter 2016, when $5.338 billion in loans were closed. The home lender closed more, however, than the $4.2 billion funded in the first-quarter 2016.

A further decline in mortgage production is likely based on total pull-through adjusted lock volume, which fell to $3.8 billion in the first-quarter 2017 from $4.9 billion in the previous three-month period.

“We right-sized the originations segment to operate efficiently in the current interest rate environment,” Nationstar Chairman and Chief Executive Officer Jay Bray stated in the report.

Nationstar serviced $470 billion as of the conclusion of the most-recent three-month period. The servicing portfolio
was modestly lower than $473 billion as of year-end 2016 but has expanded from $386 billion at the same point in 2016.

“We presently have approximately $155 billion UPB scheduled to board throughout 2017,” the report said.

On its balance sheet were $10.849 billion in reverse mortgage interests and $0.150 billion in mortgage loans held for investment.

Sixty-day delinquency was 4 percent as of March 31, 2017. The rate
improved from 5 percent three months earlier and 6.5 percent previously reported for one year earlier.

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Mortgage Daily Staff

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