CWM Mortgage Holdings Inc. reported an earnings increase of 18% in its third quarter.
The company's Indy Mac unit sold $832 million of loans in the period through real estate mortgage investment conduit (Remic) securities. Indy Mac's first subprime mortgage securitization of $202 million is included in that total.
Indy Mac is one of several conduits in a program with Freddie Mac, formally the Federal Home Loan Mortgage Corp. The unit can purchase subprime and jumbo loans originated using Freddie's Loan Prospector software and package them for sale.
The company announced separately that originators could now also access Oasis, Indy Mac's own loan software, through Freddie Mac's Goldworks network. Customers will not have to be users of Loan Prospector. Oasis will automatically send loans to Loan Prospector for evaluation.
CWM Mortgage's executive vice president, Michael W. Perry, said he expects Indy Mac to become a top-10 player in the subprime securitization market.
He added that it was not enough to just sit down and look a borrower in the face when underwriting a subprime loan. "With automated underwriting, the computer gets feedback on every single loan," he said.
CWM Mortgage also purchased $859 million of jumbo and nonconforming loans in the third quarter and $107 million in subprime loans through Indy Mac. The company's master servicing portfolio's assets increased $478 million, to $10.9 billion.
Income from the master servicing portfolio increased $4.1 million in the second quarter, to $9.2 million. Prepayments slowed in the second quarter, from $410 million to $298 million.
CWM Mortgage, a real estate investment trust, is managed under contract by Countrywide Credit Industries but separately traded on the New York Stock Exchange.