Flagstar Sells Servicing Rights
Flagstar Bancorp here faced plenty of headwinds that held back earnings in the last year, but a gain from the sale of mortgage servicing rights helped offset some of the problems.
Still, Flagstar posted fourth-quarter earnings of $6.9 million, down from fourth-quarter 2005 earnings of $22.8 million. Earnings for all of 2006 totaled $75.2 million, down from $79.9 million in 2005.
The company said its 2006 results were hurt by lower interest income, a decline in gain on sales, and a one-time charge in the fourth quarter relating to a fidelity bond coverage dispute. Flagstar sold servicing rights on $25.2 billion of home loans last year, up from MSR sales of $7.2 billion during 2005.
That yielded gains of $92.6 million for Flagstar in 2006, compared with gains on MSR sales totaling $18.2 million in 2005. But Flagstar only sold MSRs on $2.3 billion of home loans during the fourth quarter of 2006. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com