PHH Earns $90M in 4Q

PHH Corp., Mt. Laurel, N.J., the nation's largest private label funder and servicer, earned $90 million in the fourth quarter, triple its profit in the same period a year earlier. Its loan production and servicing segments had gross profits of $65 million and $86 million, respectively. However, PHH noted that it had to reduce the asset value of its mortgage servicing rights by $57 million during the period "due to prepayments and recurring cash flows and $10 million of credit-related charges, which was comprised of foreclosure-related charges of $11 million partially offset by a reduction of reinsurance-related charges of $1 million." The writedown was not all that surprising given the nature of interest rates these days, but some larger bank-owned servicers actually marked up the value of their MSRs in 4Q. New CEO Jerry Selitto noted that the company's servicing segment "continued to be affected by provisions for credit-related reserves due to foreclosure activity. We are monitoring our potential exposure carefully," he said.