Nationstar Mortgage returns to profit in 3Q
LEWISVILLE, Texas (AP) — Mortgage servicer Nationstar Mortgage Holdings Inc. returned to a profit in the third quarter, as revenue more than tripled on higher servicing fees.
The company's servicing portfolio, as measured by unpaid principal balance, totaled $198 billion for the quarter. That's up 3 percent from the second quarter and an increase of more than 92 percent from the end of the 2011 third quarter.
Mortgage servicing fee income more than doubled to $135.5 million, lifting total revenue to $277.2 million from $90.9 million a year earlier. That easily beat the $249.2 million that analysts were expecting.
The company reported net income of $55.1 million, or 61 cents per share, for the three months ended Sept. 30. That compares with a loss of $3.1 million, or 4 cents per share, in the prior-year quarter.
Excluding costs related to Nationstar's failed bid for the assets of Residential Capital, or ResCap, and other expenses, Nationstar earned 64 cents per share in the latest quarter — in line with expectations, according to FactSet.
But shares still fell 10 percent to close at $27.11. That's on top of a 9 percent drop Monday, on news that MetLife agreed to sell its mortgage servicing portfolio to JPMorgan Chase.
That's the second portfolio on the block that hasn't gone to Nationstar. ResCap, Ally Financial Inc.'s mortgage lending and servicing subsidiary, filed for Chapter 11 bankruptcy protection in May and its assets were put up for auction. Last month, ResCap's board gave preliminary approval to a $3 billion offer from Ocwen Financial Corp. after Nationstar said it would not sweeten its own bid.