PHH Corp., Mt. Laurel, N.J., reported net earnings of $181 million for the fourth quarter and $48 million for the full year 2010, helped by strong performance in its mortgage segment, company executives said.
The results compared to net earnings of $17 million for the fourth quarter 2009 and $153 million for the full year.
Separately, the company said in a statement its chief financial officer Sandra E. Bell is leaving the company "to pursue other opportunities."
David Coles, a managing director at Alvarez & Marsal, has been named interim CFO. PHH has hired Heidrick & Struggles to search for a new CFO.
Jerry Selitto, president and chief executive, said PHH's mortgage production volume increased in 2010 by 30%, to $49 billion and its market share went from 2.1% at the end of 2009 to 3.1% at the end of last year.
Its mortgage servicing rights portfolio increased by $15 billion during 2010 to $166 billion, while the weighted average interest rate fell by 40 basis points to 4.9%.
PHH had a profit of $284 million on its mortgage business for the fourth quarter, with $33 million coming from the origination side and $251 million from the servicing side.
The servicing profit includes a $287 million market-related adjustment to the value of its MSR.
For the year, the mortgage business had a $27 million profit, of which the origination business contributed $268 million. The servicing side had a $241 million loss, including a market-related write-down of $166 million on its MSRs.
PHH noted that mortgage origination margins came under pressure as the fourth quarter progressed and that pressure has continued into the early part of this year.
The company is seeing success in its plans to increase the share of third party originations, as the percentage of wholesale/correspondent closings hit 39% in the fourth quarter, up from 20% for the fourth quarter 2009.
Foreclosure costs were $21 million during the fourth quarter, up from $11 million one year earlier. This was due to higher loss provisions from an increase in loan repurchases and indemnifications.
