Repurchases Hit Pulte's Mortgage Unit

Pulte Homes, Inc., reported a $36.3 million pre-tax loss on its mortgage operations in the fourth quarter, blaming the performance on loan repurchase charges. In the same quarter a year earlier, the home builder's mortgage division lost $7.9 million. Pulte Home Mortgage saw total fundings fall by 33% to $2.28 billon in 2009 despite its August acquisition of Centex Corp, and its mortgage subsidiary. However, fourth quarter originations got a boost from the merger. PHM funded $906 million in loans, compared to $848 million in Q4 2008. Roughly 40% of its production was FHA-based. (Pulte sells most of its loans to investors in the secondary market.) The Bloomfield Hills, Mich., based builder says its loss exposure on mortgage loans "increased significantly" since its takeover of Centex's mortgage operations. The company also noted "increasing aggressiveness" on the part of investors presenting claims on defaulted loans in its third quarter securities filing. Pulte recorded losses related to contingent repurchase obligation charges of $37 million in the fourth quarter, compared to $23.6 million for the previous three quarters. Overall, Pulte Home posted a $1.2 billion loss for 2009 after receiving $800 million of income tax benefits that Congress passed in November. The bill extended the homebuyer tax credit program until April 30 and extended the carry-back period for operating losses (for home builders and others) to five years from two.