HomeStreet Inc. reduced the size of its residential servicing portfolio, and cut the size of its mortgage staff, but mortgage losses still widened. Home lending was busier, though.
HomeStreet’s second-quarter earnings report revealed $9 million in income before income taxes during the three-month period that concluded mid-year.
The Seattle-based bank-holding company’s earnings plummeted from the same-three months last year, when it earned $16 million. But income was up from $8 million in the preceding period.
Pre-tax mortgage earnings swung to a $7 million loss from a $3 million second-quarter 2017 profit. Losses widened from the first quarter of this year, when they neared $6 million.
HomeStreet reported $1.740 billion in single-family loan originations during the second quarter. Business was better than $1.452 billion the previous quarter. But volume fell short of the $2.011 billion closed a year previous.
In the six months ended June 30, mortgage originations amounted to $3.192 billion.
Third-quarter originations are likely maintaining the second-quarter pace based on rate-lock commitments, which crept up to $1.7 billion from $1.6 billion.
Single-family loans serviced for third parties totaled $19.073 billion at the end of last month. The servicing portfolio was reduced from $23.220 billion as of March 31 and $21.105 billion as of June 30, 2017. The latest total was comprised of $18.494 billion in agency servicing and $0.579 billion in other loans.
The weighted-average servicing fee was 0.29 percent, and the ratio of mortgage-servicing rights carrying value to the loan balance was 1.29 percent.
In addition to a previously announced MSR sale and home loan center closings, HomeStreet said it lowered its consolidated risk-weighted assets by modifying its loss-sharing arrangement with Fannie Mae on DUS servicing.
Residential assets grew to $1.929 billion from $1.915 billion at the end of the first quarter and $1.563 billion at the same point last year. Last month’s total consisted of $1.416 billion in single-family loans and $0.513 billion in home-equity and other loans.
Multifamily originations soared to $0.072 billion from $0.022 billion and were also stronger than $0.058 billion in the second quarter of last year.
HomeStreet serviced $1.358 billion in multifamily DUS loans for third parties, more than $1.324 billion in the last report. The portfolio was just $1.136 billion as of mid-2017.
CRE holdings
expanded to $2.655 billion from $2.579 billion and was also greater than $2.371 billion as of the same date last year. The total most recently consisted of $1.041 billion in commercial mortgages, $0.836 billion in multifamily loans and $0.778 billion in construction financing.
Mortgage banking headcount was cut to 1,235 full-time equivalent employees
from 1,307 people in the preceding quarter and 1,487 in the same three-month period last year.
Company-wide staffing was reduced to 2,253 people from 2,384 as of March 31 and 2,542 as of mid-2017.
