Mortgage servicer PHH Corp. posted a net loss in the fourth quarter, as its mortgage production and servicing segments both struggled as the year ended. This is in contrast with the profits it saw in the same period last year.
The Mount Laurel, N.J.-based company announced in a Feb. 17 press release that it lost $33 million, or 62 cents per diluted share. Last year, the company made $45 million, with earnings per diluted share coming to 41 cents. Discontinued operations account for $1 million of the company's losses in the fourth quarter of 2014, while in 2013 it added $17 million to its overall profits.
The company also reported its annual results in the press release. It earned $81 million in 2014, a 40% decrease from 2013 when the company's profits reached $135 million.
Revenue in the fourth quarter fell 24% to $180 million in the fourth quarter from $238 during the same period in 2013.
PHH's mortgage servicing segment particularly put a strain on revenue in the fourth quarter. Declining mortgage rates led to an unfavorable mortgage servicing rights fair value adjustment of $105 million. While this was somewhat offset by a net derivative gain attributable to its MSRs, overall the segment posted a $13 million loss as its loans servicing income also fell to $113 million in the fourth quarter of 2014 from $124 million during the same quarter the previous year.
While PHH earned slightly more on origination fees for its mortgage production segment — $61 million in the fourth quarter of 2014 as opposed to $60 million during the same quarter the year before — it earned lower gains on the sale of its loans.
PHH saw a large influx of funds over the course of the year thanks to the June 2014 sale of its fleet services division.
