Source One Mortgage Services Corp., Farmington Hills, Mich., reported a profit of $18.5 million for the quarter ended March 31. It included an $18.3 million after-tax gain on the sale of $9.9 billion in mortgage servicing rights and a $700,000 extraordinary after-tax loss on the early retirement of debt. The sale represented about 25% of the company's servicing portfolio.
The profit was in contrast to a loss of $35.2 million a year earlier, reflecting a $44.3 million after-tax charge related to a change in the method for measuring impairment of the company's purchased mortgage servicing rights.
Excluding the effects of the gain on the sale of servicing, the extraordinary loss, and the accounting change, net income for the first quarter decreased to $800 million from $9.1 million a year earlier. The drop reflected lower revenues related to the rapid erosion of mortgage originations.
Separately, Triad Guaranty Inc. said earnings jumped 39% in the first quarter of 1995, reaching $1.7 million.
The Winston-Salem, N.C.-based mortgage insurance company reported earnings per share of 39 cents, compared with 28 cents in the first quarter of 1994.
Darryl W. Thompson, Triad's president and chief executive, said growth in written and earned premiums and a lower loss ratio helped the company report a profitable quarter.
"We are quite pleased with the growth in earnings, which is fueled by growth in renewal premiums and continued production of new business," Mr. Thompson said.
New insurance written in the first quarter of 1995 was $280 million, compared with $376 million a year earlier following the nationwide decline in production of insured mortgage loans and the seasonally low first- quarter loan production trend.
Triad's total assets for the first quarter were $88.9 million, versus $86.7 million in the fourth quarter of 1994.