PHH Corp., which controls the nation's seventh largest residential lender, earned $28 million in the second quarter, almost double what it earned in the same period a year ago.
PHH Mortgage also reported that it is closing more purchase money loans than refis, at least compared to 2Q09.
The Mt. Laurel, N.J., lender, the largest private label funder in the U.S., originated $10.1 billion of product, a 7% decline from 2Q09.
"Home purchase closings represented 61% of total originations during the second quarter of 2010," the company said.
Even though the entire company made money, PHH Mortgage suffered a $273 million loss on its servicing business due to a reduction in the value of mortgage servicing rights. PHH said it suffered from a "$46 million adjustment due to prepayments and recurring cash flows, a $15 million adjustment due to reinsurance-related charges and $20 million of foreclosure-related charges."
In the company's earnings statement, CEO Jerry Selitto said the firm continues to look for ways to stabilize its funding sources.
The market reacted positively to the earnings report. At noon Tuesday its shares were trading up almost 9% to $22. Besides being a mortgage banker, PHH operates a Fleet leasing and management business. Profits in its fleet business grew by 63% in 2Q on a sequential basis.
