After plummeting in the first quarter, Ally Financial Inc. was able to eke out a gain in originations. Rising repurchases hurt mortgage earnings, though company-wide income improved.
In its second-quarter earnings report, the New York-based financial services firm said it originated $12.3 billion in domestic mortgages, up slightly from $11.9 billion in the first quarter. Of the major lenders tracked by Mortgage Daily so far — Ally, MetLife Home Loans and Quicken Loans Inc. have been the only companies to report an increase from the first quarter.
The latest volume included $10.6 billion in prime conforming production, $1.5 billion in government business and $0.3 billion in jumbo mortgages.
In the second-quarter 2010, volume was $13.2 billion.
The primary mortgage servicing portfolio finished June at $360 billion. Given that around $6 billion of the portfolio is international, the domestic portion is around $354 billion.
The domestic portion of the servicing portfolio was $355.7 billion at the end of March.
(After this story was published, Ally filed a Form 10-Q with the Securities and Exchange Commission on Aug. 9 indicating that the U.S. portion of its primary servicing portfolio was $354.284 billion and the international portion was $6.170 billion. The third-party portion of the total servicing portfolio was $342.397 billion.)
The held-for-investment mortgage portfolio was $9.4 billion on June 30. The total included $2.4 billion in the “origination and servicing” segment and $6.9 billion in the legacy portfolio segment.
The mortgage portfolio totaled $9.5 billion on March 31 and $9.8 billion at the same point last year.
On Ally Bank’s mortgage investment portfolio, the 30-day delinquency rate improved to 3.4 percent from 3.5 percent and was 4.0 percent at the close of the second quarter last year.
Outstanding repurchase claims finished the first half of 2011 at $1.079 billion, growing from $0.838 billion at the end of the first quarter. After setting aside $184 million in repurchase expense, repurchase reserves stood at $829 million.
More than three-quarters of repurchase claims over the past year were from the 2006, 2007 and 2008 vintages.
Earnings from mortgage originations and servicing fell to $47 million from $73 million three months earlier and $249 million a year earlier. But the company also lost $174 million from the legacy mortgage business, worse than the $39 million loss in the prior quarter and $19 million loss in the same period during 2010.
Earnings before taxes at Ally Financial increased to $466 million from the first quarter’s $428 million but came in below $727 million in the second-quarter 2010.
Ally Chief Executive Officer Michael A. Carpenter called the latest financial results “solid.”
