Countrywide Credit Industries, swimming hard against a tide of mortgage prepayments, increased earnings by 35% to $46.2 million in its second fiscal quarter, which ended Aug. 31.

Prepayments climbed to an annual rate of 34% of the total servicing portfolio, from 30% in the preceding quarter and 16% a year earlier. The heavy runoff required amortization of $80 million, including an allowance for further pre-payments. But that charge was offset by a $44 million profit from hedging, mainly a position in long-term Treasuries that has become more valuable with the deadline in interest rates.

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