SANTA ROSA, Calif. - North American Mortgage Co. announced third-quarter earnings of $21.1 million. This is an increase from a $4.2 million loss in the third quarter of 1994.
The earnings include the implementation of FAS 122, which allows the recognition of originated servicing rights on a company's books.
"The decline in interest rates stimulated refinance activity," said Terrence G. Hodel, president and chief operating officer of North American in a prepared statement. Refinances accounted for 33% of the lender's total originations in the third quarter, Mr. Hodel said. "To the extent that interest rates continue to decline, we anticipate continued activity in this part of our business."
Expenses for the quarter decreased 5% from the same period a year ago to $58 million. This was attributed to layoffs in 1994.
The company's 46% increase in revenue was attributable to the increase in sale of loans and the implementation of FAS 122, and from the sale of servicing. Despite the increase in the amount of servicing sold by North American, the gain from the sales was down 22% from the previous year. The company said the decline resulted from the onset of FAS 122.
In other news, North American announced that it will pay shareholders its regular dividend for the third quarter of this year.
The dividend of 6 cent per share is payable on Nov. 15 to holders of record of Nov. 3.
North American, the second Largest independent mortgage company, operates in 29 states.
