PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.
The mortgage production segment had a 108% increase in profits to $52 million from $25 million one year prior as a result of the interest in the appraisal business.
Loan volume leaped to just under $14 million from nearly $8 million. Refinancings made up almost $10 million, up 120% over the first quarter 2010, while purchase loans were $4 million, up 21%.
Retail volume for the period was $10 million, up 60%, while the $4 million of wholesale production represented a 137% gain for that channel.
Gain on sale was off by 44% to $59 million; PHH said this reflects a more normalized level of industry originations.
The mortgage servicing segment earned $14 million vs. a loss of $13 million one year prior. It recorded a $25 million increase in the fair value of its mortgage servicing rights due to higher long-term interest rates and improved delinquencies in the portfolio.
But there was a $12 million unfavorable change in fair value due to prepayments. The size of the portfolio increased to $171 million on March 31, vs. $153 million on March 31, 2010.
During the quarter, delinquent loans fell to 3.15% of unpaid principal balance from 3.88% at Dec. 31, 2010. But foreclosure-related charges of $15 million reflected a continued high level of repurchase demands and loss severities.
