Countrywide Financial Corp., Calabasas, Calif., has reported consolidated net earnings of $634 million ($1.03 per share) for the third quarter, a 27% increase from $498 million ($0.81 per share) in the third quarter of last year that was attributed mainly to the company's mortgage segment.Pretax earnings by the mortgage banking operations totaled $703 million in the third quarter, up 42% from $496 million a year earlier. "This increase resulted primarily from a $280 million improvement in servicing sector earnings, partially offset by an $83 million decrease in production sector earnings," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. Loan production in the mortgage segment totaled $131 billion, up sharply from $77 billion in the third quarter of 2004. "The increase in loan volume resulted in a $37 billion increase in loans sold," Mr. Mozilo said. "The benefit of the increase in sales, however, was more than offset by the decline in margins." Countrywide said its servicing portfolio rose to a record $1.05 trillion as of Sept. 30, up $262 billion from the level of a year earlier.

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