PHH 3Q loss widens on low mortgage rates
PHH Corp. (PHH) reported a net loss of $148 million in the third quarter, or $2.62 per share, up from last year's same quarter loss of $8 million, or 14 cents a share. Revenue for the three months ended Sept. 30 fell to $384 million from $572 million in the comparable period in 2010. The losses are due, in part, to a negative fair value adjustment of PHH's mortgage servicing rights. The mortgage-production segment of the Mount Laurel, N.J.-based company reported third-quarter income of $95 million, while the servicing segment lost $368 million for a combined loss in the mortgage-services unit of $273 million. Jerry Selitto, president and chief executive officer, said the company experienced a surge of refinancing in the quarter that increased volume in its mortgage production segment and enabled higher margins. Total mortgage closing volume was $12.7 billion of which 67% was retail and 33% was wholesale/correspondent. This volume represents a 1% increase over the third quarter of 2010. PHH said interest rate lock commitments expected to close of $11.4 billion in the third quarter 2011, reflecting strong refinancing. IRLCs expected to close declined from $14.4 billion in third quarter 2010 because that quarter's refinance activity commenced earlier in the quarter and at activity levels in excess of the third quarter 2011. Write to Justin T. Hilley. Follow him on Twitter @JustinHilley.