Quarterly losses at the parent of PHH Mortgage soared past $200 million as home-lending volume fell. The company is transitioning into a smaller business.
Before income taxes, parent-PHH Corp. experienced a $206 million loss from the period that started on Oct. 1, 2016, and concluded on Dec. 31, 2016.
The Mount Laurel, New Jersey-based firm
presented the numbers, in addition to other operational and financial results, in its fourth-quarter 2016 earnings report.
Losses ballooned from $29 million in the previous three-month period and $83 million in the same quarter the previous year.
During the final-three months of last year, mortgage originations came to 18,518 loans for $8.885 billion. Business subsided from the previous period, when 21,076 loans were closed for $10.017 billion. During the same three-month period in 2016, mortgage production totaled 20,825 loans for $8.842 billion.
Fourth-quarter 2016 volume included $7.100 billion in private-label services and $1.785
billion in retail lending.
Business is likely seeing a further decline in the first-quarter 2017 based on loan applications, which sank to $8.1 billion in the fourth-quarter 2016 from $12.4 billion three months earlier.
Further evidence of the current-quarter slowdown are interest rate lock commitments, which fell to $0.7 billion from $1.2 billion.
Full-year mortgage production amounted to 79,462 loans for $37.229 billion.
The previous year, PHH closed 97,214 loans for $40.604 billion.
As of Dec. 31, 2016, the company serviced 567,647 loans for $85.472 billion. The servicing portfolio was down from 588,700 loans for $89.598 billion three months earlier and 642,379 loans for $99.869 billion one year earlier.
In addition, 264,718 mortgages for $89.170 billion were sub-serviced as of the most-recent date.
The fourth-quarter 2016 capitalized servicing rate was 0.82 percent, and the weighted-average servicing fee was 28 basis points.
Delinquency
of at least 30 days, excluding foreclosures, climbed to 2.56 percent from 2.24 percent as of Sept. 30, 2016, and 2.47 percent as of year-end 2015.
PHH said with its decision to exit unprofitable businesses, it is “transitioning to smaller, more focused, capital light business comprised of subservicing and portfolio retention.” The transition has been dubbed “PHH 2.0.”
