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Nationstar boosts earnings on mortgage originations, servicing portfolio

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Nationstar Mortgage (NSM) earned $50.2 million, or 67 cents a share, in the first three months of 2012 — a large increase from a quarter and year earlier.

The Lewisville, Texas, company — reporting its quarterly results Tuesday for first time since it went public in early March — saw its earnings rise from $14.9 million, or 21 cents a share, in the fourth quarter 2011 and $7.4 million in the first quarter 2011.

Revenue grew 35% from quarter-to-quarter to $162 million, also nearly double the year-earlier tally of $85.2 million.

Deals in the mortgage servicing market have drawn a lot of attention to Nationstar in just the past couple months. The company announced a deal Monday to acquire $374 billion in servicing rights from Residential Capital, which filed for bankruptcy on the same day.

Nationstar, a subsidiary of Fortress Investment Group (FIG), also came to agreements to acquire $63 billion in MSRs from Aurora Bank and the reverse mortgage portfolio of MetLife Bank (MET).

Those three deals have not yet closed. Nationstar said its servicing portfolio held $103 billion in unpaid principal balance at the end of the first quarter, up 6% and 82%, respectively, from a quarter and year earlier.

The ResCap deal would bring Nationstar’s total servicing and subservicing book to $550 billion, making it the largest nonbank residential mortgage servicer according to the company.

During a conference call, executives said Nationstar would continue to look at other acquisition opportunities, though they'd be in the smaller MSR range of $10 billion to $40 billion.

Nationstar also increased its originations 6% and 82% from a quarter and year earlier to $1.2 billion. That, executives said, was driven primarily by changes in the government's Home Affordable Refinance Program, a trend they expect to last through 2012.



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