Nationstar Earnings up 52% on Servicing Revenue, Plans to Acquire More

Nationstar Mortgage Holdings (NYSE: NSM) saw earnings surge 52% during the third quarter to $55.1 million or 61 cents per share, up from $36.3 million in the year-earlier quarter. However, earnings fell short of analysts’ estimates of 65 cents per share, sending the company stock price down more than 7% during trading Tuesday.

The company cited strategic goals around its servicing portfolio, which has experienced continued growth in recent months including the acquisition of reverse mortgage servicing rights from both MetLife and Bank of America following the companies’ exits from the reverse mortgage business. Nationstar is seeking additional servicing acquisitions through year-end, its executives say. 

“We generated record net income in the quarter and we remain focused on three major strategic goals,” said Jay Bray, Nationstar CEO said Tuesday. “First, we are committed to executing on our servicing acquisition pipeline of $600 plus billion, and we are pleased to announce we expect $30 billion of acquisitions to close in the fourth quarter. We also executed flow agreements representing $10 billion in annual UPB and we are targeting $25 to $50 billion of annual flow.”

The company is also seeking additional opportunities through origination and other channels, Bray said. 

“Second, we see a significant opportunity to organically grow servicing by continued focus on recapture and expansion of our builder, wholesale and other origination channels.”

As of September 30, the company held $452.9 million in reverse mortgage servicing interests, up from $310.1 million at the end of the second quarter. 

Written by Elizabeth Ecker

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