PHH Corp., the nation’s fifth largest residential funder, lost $41 million in the second quarter as the fair value of its mortgage servicing rights declined by $117 million during the period.
Although the number doesn’t look pretty, it represents an improvement over the $133 million the company lost in 2Q10 when the fair value of its MSRs declined by $274 million.
But discussing earnings, company CEO Jerry Selitto stressed the positives: Factor out the MSR adjustment, and PHH’s servicing business had strong revenues for the period, with servicing income rising $20 million to $117 million compared to 2Q10.
As of June 30, PHH held $174 billion of MSRs, a 12% gain. According to figures compiled by National Mortgage News and the Quarterly Data Report, PHH is the nation’s seventh largest servicer.
Still, PHH had problems with foreclosures and increased repurchase requests.
Its origination business saw profits of $25 million, off 49% from the year ago.
PHH Mortgage, the nation’s largest private label funder, closed $9.7 billion of home mortgages in 2Q, down a modest 4% from 2Q10. The nonbank lender is based in Mt. Laurel, N.J.
