Stonegate Mortgage Corporation’s (SGM) first quarter mortgage loan origination volume increased 17% to $2.84 billion during the first quarter of 2015, up from from $2.42 billion in the first quarter of 2014.

However, this is a 16% drop from $3.37 billion in originations in the fourth quarter of 2014.

Revenues also increased, rising 16% to $44.3 million in the first quarter of 2015. This is up from $38.3 million in the first quarter of 2014, and up 67% from $26.5 million in the fourth quarter of 2014.

The year-over-year growth is primarily due to increases in gains on mortgage loans held for sale, net, loan servicing fees, interest and other income, loan origination fees and gain on sale of mortgage servicing rights. But it was substantially offset by a decrease in the fair value of the lenders mortgage servicing rights and increased loan payoffs and principal amortization of its MSRs.

The lender’s earnings revealed that on April 30, Stonegate completed a sale of MSRs with an underlying UPB of nearly $2 billion in Ginne Mae loans to an unrelated third party. 

Under the sale, Stonegate will perform temporary sub-servicing activities with respect to the underlying loans through the established transfer date, targeted for the third quarter of 2015.

Meanwhile, the lender posted a net loss for the first quarter 2015 of $11.1 million, or $0.43 per diluted share, compared to net loss of $7.9 million , or $0.31 per diluted share in the first quarter of 2014, and $21.4 million , or $0.83 per diluted share in the fourth quarter of 2014.

“I am pleased with the way our integrated business model performed in the first quarter.  The low rate environment resulted in increased servicing payoffs and reduced MSR valuations,” said Jim Cutillo, CEO of Stonegate Mortgage. “However, the strong origination and financing results show that our integrated business model is capable of performing well over any interest rate cycle.  We remain committed to freeing up capital from the servicing segment to reinvest in our origination and financing businesses, which provide better leverage and return potential.  The strength of our balance sheet continues to put us in a strong position to take advantage of changing market dynamics.” 

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