Mr. Cooper makes $ 439 million, close to $ 1 trillion in mortgage servicing.

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Mr. Cooper on Thursday reported second-quarter earnings of $ 439 million, benefiting from some temporary revenue streams as he made progress towards his goal of generating long-term profit with $ 1 Trillion Service Portfolio.

The company’s profit fell slightly from $ 561 million for the previous quarter, but much higher than $ 73 million a year earlier. Earnings per share of $ 4.85 per share beats the Seeking Alpha estimate by $ 1.38. Reported revenue of $ 574 million fell short of SA’s estimate of $ 92 million.

Mr. Cooper’s portfolio of services was $ 654 billion, up 4% quarter-on-quarter and 16% annually. The acquisition of mortgage rights accounted for a $ 16 billion increase in outstanding principal, followed by mortgage loans from other companies through the correspondent channel ($ 12 billion), subcontracting and other sources ($ 10 billion), and direct payments. consumer goods ($ 9 billion). The outflow of MSR reduced the net portfolio growth by $ 22 billion.

The company expects to achieve its goal of becoming a $ 1 trillion service business through such channels over the next few years, executives said.

“This is not a vision of the future, this is the near term,” Vice Chairman and President Chris Marshall said in an interview.

He stressed that the company will focus on scaling up mortgage production in order to build a balanced company that will perform well regardless of whether rates fall in favor of lenders or rise in favor of maintenance personnel. During the quarter, Originations generated $ 213 million in pre-tax operating income.

Notably, in the service category, Mr. Cooper has $ 181 million in revenue from early repurchase of loans in deferral of securitized pools. (Some companies register EBO as part of origin, but Cooper records this as a service function, Marshall noted.) EBO revenues are likely to still be significant in the next quarter, but are likely about 25 or 30% lower, and they may decline in the next quarter. “fourth quarter,” he said.

After this foreclosure which restart could start slowly entering the market and potentially being auctioned through Mr. Cooper’s Xome platform, Marshall said. List of pandemic abstinence cases can be modestbut add to that any pre-existing workout that was stopped by a federal ban and the volumes could be higher, he said.

“It will take some time until the moratorium is over, so you will see [Xome] very, very much back to 2022 but it will take a while [foreclosures] to go through this process, ”he said:“ To be honest, we are very comfortable with it. We are all trying to help the client, and foreclosures are not a good thing, but when they do happen, they go through an auction, and that’s what the Xome platform does. “

Executives mostly declined to comment when asked, Ginny Mae’s proposed capital rule it would be a problem or a potential opportunity if it prompted other players to sell assets. But during the conference call, they stated that while waiting for a discussion with Ginny, they did not expect it to hurt their business.

Overall, Mr. Cooper’s results pushed the stock slightly higher. Its share price was nearly $ 37 by Thursday afternoon’s deadline. He opened the day slightly below $ 36.50. Cooper’s total pre-tax income from continuing operations for the quarter was $ 227 million.



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