Record originations helped Mr. Cooper Group generate its first full-quarter profit since its formation through
But its profitability was lower than it might otherwise have been due to a decline in the value of its mortgage servicing rights.
The company had net income of $83 million for the third quarter, compared with
In the first quarter this year, Mr. Cooper
Mr. Cooper originated $11.9 billion during the third quarter, with purchase mortgages making up just 39% of its production. In the second quarter, it funded just under $10 billion, with 53% being purchase loans.
Correspondent loan purchases contributed $6.4 billion to third-quarter production, while $4.9 billion came through the direct-to-consumer channel and $600 million through wholesale purchases.
Pretax income in this segment was $178 million, up from $118 million in the second quarter.
Even with the $83 million mark-to-market hit to the MSR portfolio, servicing pretax income improved compared with the second quarter. At $9 million, the number was up from a loss of $135 million during the second quarter. There was a $231 million charge to the fair value of Mr. Cooper's servicing during the previous fiscal period.
The pretax income for Mr. Cooper's
Separately, Redwood Trust recorded net income of $34 million, up from $31 million
"The third quarter marked a historic time for Redwood, a time where we made significant progress positioning the company for the future of housing finance," said Redwood Trust CEO Chris Abate in a press release. "While the rate environment offered a variety of opportunities and challenges, we were able to leverage the strength of our business model to navigate through continued market volatility and execute on our long-term strategic initiatives. We spent ample time in the third quarter focused on
During the third quarter, Redwood purchased $1.5 billion of jumbo mortgages and originated another $162 million of business purpose residential loans. It also closed three securitizations totaling $1.1 billion.