HomeStreet Inc., Seattle, said its net gain on mortgage loan origination and sales activities in 1Q13 was $54 million, down 22% from $69 million in 4Q12 but up 83% from nearly $30 million for 1Q12.
The 1Q13 results include a $4 million adjustment related to a change in the application of the company’s methodology it used to value its interest rate lock commitments.
Total volume for 1Q13 was $1.2 billion, a decline of $327 million from 4Q12 and an increase of $480 million (67%) when compared with 1Q12. Production during the period was split between 50% purchase volume and 50% refinance versus just one-third purchase business in 4Q12.
Interest rate lock commitments were $1 billion in the quarter, down almost 18% from 4Q12 and up 13% from 1Q12, in part because of the inventory shortage, as well as normal seasonal home buying patterns.
During the first quarter HomeStreet added 32 mortgage production personnel and opened three new locations, including a stand-alone loan office in Pasadena, Calif.
HomeStreet also had servicing income of $3.1 million in 1Q13, up 372% over 4Q12, but down 61% from 1Q12.
It said the quarter-to-quarter increase was primarily driven by the impact in the prior quarter of changes in the fair value of the mortgage servicing rights due to changes in model inputs and assumptions related to changes to the Federal Housing Administration streamlined refinance program and expected increases in housing values.
Both of those are expected to higher projected prepayment speeds. On the other hand, during 1Q13 actual prepayment speeds were lower due to seasonality and reduced refinance activities.
HomeStreet had 1Q13 net income of $11 million, down from $22 million in 4Q12 and $20 million in 1Q12.
In March, the Federal Reserve Board
