PHH Corp. in Mount Laurel, N.J., swung to a loss in the third quarter, as the mortgage servicer and originator set aside reserves to cover the potential cost of regulatory investigations.
PHH reported a third-quarter net loss of $50 million, compared to net income of $215 million in the year-ago period. PHH's loss amounted to 84 cents per share, compared to $4 per share a year ago.
The $50 million loss includes a $44 million pretax provision for legal and regulatory reserves, which equated to 44 cents per share. The results also include a $22 million pretax unfavorable market-related mortgage servicing rights fair value adjustment.
The Consumer Financial Protection Bureau in June
Net revenue rose 11.2% to $169 million, on a $50 million net derivative gain related to mortgage servicing rights; and higher origination and other loan fees.
Mortgage applications rose 7% to $12.2 billion. Total closings rose 5% to $10.3 billion. Refinance closings rose 13% to $4.4 billion.
Total expenses fell 8.9% to $256 million, on lower salaries, commissions, foreclosure and repossession expenses, and other operating expenses.
PHH was spun off from Cendant Corp. (now known as Avis Budget Group) in February.
