PHH Corp. in Mount Laurel, N.J., reported a strong jump in income due to favorable adjustments to mortgage servicing rights and increased mortgage application volume.
The mortgage production and servicing company posted net income of $21 million in the first quarter versus a loss of $42 million during the same period in 2014. Earnings per share came to 40 cents.
PHH grew origination and loan fees to $58 million and net gains on loans to $82 million during the quarter, representing increases of 23% and 61% year-over-year, respectively. Fee-based closing and refinances contributed to much of this increase.
And while the mortgage production segment reported an overall net loss of $19 million due to higher expenses, this was a vast improvement over the $60 million beating the segment took a year ago.
Additionally, the mortgage servicing division of PHH tripled net loan servicing income to $131 million from $42 million a year ago, including a favorable change in fair value market adjustments to MSRs and a $53 million net derivative gain.
The servicing segment overall posted a net profit of $57 million, as compared with a $29 million loss in the first quarter of the previous year.
Expenses for the company overall increased from last year by about 13%, to $230 million. This included $8 million in costs from the sale of PHH's Fleet business.
