Tag Archives: Profits

The Mortgage Bankers Association (MBA) reported Tuesday that independent mortgage banks and mortgage subsidiaries of chartered banks posted a net profit of $954 on each loan originated in the year's second quarter. The report represents a significant turnaround from the first quarter, when mortgage banks took a net loss of $194 for each loan.

Nationwide sales of flipped homes dropped both quarter-over-quarter and year-over year in the second quarter of 2014 as profit margins shrank, according to RealtyTrac. About 31,000 homes were flipped—bought and sold again within 12 months—in Q2, the company reported, accounting for 4.6 percent of all single-family home sales in the United States.

Following the filing of a separate suit with the U.S. Court of Federal Claims, New York-based hedge fund Pershing Square Capital Management has filed a second suit against the U.S. government over the handling of GSE profits. In its compliant, Pershing Square suggests that the GSE dividends being diverted into Treasury, which amount to billions of dollars, should be divided among the common shareholders for the GSEs.

Investors have filed another lawsuit against the U.S. government, alleging that common stockholders in Fannie Mae and Freddie Mac have been shortchanged. Three individual common shareholders along with Pershing Square Capital Management alleged in their complaint that the diverting of GSE profits into Treasury equates to taking private property for public use without "just compensation," a practice forbidden by the Fifth Amendment.

The U.S. government is set to see another $5.6 billion from Fannie Mae and Freddie Mac as both GSEs continue to post solid earnings. Both companies released on Thursday their earnings reports for the second quarter, reporting subdued profits compared to recent quarters as settlement earnings and other previous one-time benefits subside.

Second-quarter profits at Ocwen Financial fell short compared to last year as costs came up. The company reported net income of $67.0 million last quarter, a decline of nearly $10 million from the year ago period. While revenue was up 2 percent year-on-year to $553.1 million, normalized pretax earnings took a 7 percent hit, which Ocwen chairman Bill Erbey explained was the result of higher regulatory and compliance costs and interest expense.

Bank of Americaposted second-quarter net income of $2.3 billion on revenue of $22.0 billion. A year ago, the megabank reported bringing $4.0 billion. The bulk of the year-over-year drop in profits stemmed from a $4.0 billion litigation expense, "substantially all" of which was related to legacy mortgage-related matters, the bank said.

Second-quarter profits at JPMorgan Chase dipped nearly 8 percent year-over-year as the bank continued to work with a diminished mortgage market. JPMorgan's latest earnings report, released Tuesday, shows the megabank earned $6.0 billion in profits over the latest three months, putting its performance somewhere between the $5.3 billion reported in the first quarter and $6.5 billion a year ago.

Citi released its quarterly earnings report Monday morning, posting net profit of $181 million—a decline of 96 percent compared to earnings of $4.2 billion a year ago. The second quarter's results include a $3.8 billion charge related to a $7.0 billion settlement with the Residential Mortgage-Backed Securities (RMBS) Working Group, also announced early Monday.

After a rough 2013—which saw average per-loan profits decline by nearly half year-over-year—mortgage banks are now losing money on each loan originated, the Mortgage Bankers Association (MBA) reported Tuesday. According to the trade group, independent mortgage banks and mortgage subsidiaries of chartered banks reported a net loss of $194 on each loan originated in the first quarter of the year.