Downey Financial Corp. in Newport Beach, Calif., said that third-quarter earnings fell as it lost money in mortgage servicing, income from real estate investments shrank, and expenses rose.
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Net income dropped 16.2%, to $25 million. Downey, with $15.6 billion of assets, recorded a $16.9 million loss in loan servicing, which earned it $1.6 million a year earlier. Operating expenses increased 10.9%, to $58.1 million.
Downey also reported a $8.8 million drop in gains from sales of loans and mortgage-backed securities and a $5.5 million drop in gains from sales of investments related to real estate. But net interest income rose 20.1%, to $81.9 million.
