Originations were up, earnings improved and the mortgage servicing portfolio expanded at Nationstar Mortgage Holdings Inc. The growing firm is poised for major expansion of mortgage servicing rights.
Operating subsidiary Nationstar Mortgage LLC originated $1.82 billion in residential loans during the three months ended Sept. 30, according to earnings data released Tuesday. It was the most quarterly volume ever reported for the lender.
Business barely exceeded second-quarter production of $1.80 billion but has more than doubled from the third-quarter 2011, when production totaled $0.9 billion.
So far this year, originations amount to $4.82 billion.
A record application pipeline of $5.5 billion points to an even bigger fourth quarter. Locked applications finished September at $4.4 billion.
KBÂ Homes accounted for around $0.15 billion of the latest quarter’s production, though a Nationstar executive noted in the investor call that the number is expected to grow to $1 billion and the arrangement is expected to be expanded to more builders.
The mortgage servicing portfolio finished the third quarter at $197.6 billion, growing 3 percent from the end of the second quarter. Agency loans accounted for 58 percent of the portfolio, and non-agency share was 42 percent.
A year earlier, the servicing portfolio was $103 billion.
The Lewisville, Texas-based company said that it is sitting on a $600 billion servicing pipeline, including $30 billion in bulk servicing expected to be acquired in the fourth quarter.
Mortgage investments were $238 million as of the close of the third quarter, the same as at the end of the second quarter. This asset category has diminished from $724 million a year earlier.
As of Sept. 30, delinquency of at least 60 days was 15.1 percent, jumping from 11.7 percent as of June 30. Delinquency would have been unchanged had it not been for the recent acquisitions of servicing portfolios from Aurora Bank and Bank of America.
Nationstar swung from a $3 million loss before taxes in the third-quarter 2011 to an $80 million profit. Earnings were also better than second-quarter 2012 income of $49 million.
As of the end of the third quarter, 4,100 people were employed at Nationstar. Headcount grew from 3,500 at the end of the second quarter.
