Industry News

Countrywide’s mortgage profits decline

Company cites lower margins, prepayments, loan losses as causes

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Countrywide Financial Corp. posted record earnings in 2006, even as profits in mortgage banking fell 15 percent from 2005. Countrywide's net earnings of $2.67 billion, or $4.30 per share, represents a 6 percent increase from the $2.53 billion posted in 2005. Earnings for fourth-quarter 2006 were $622 million, down 3 percent from the same quarter a year ago, Countrywide's mortgage loan servicing portfolio grew 17 percent in 2006 to $1.3 trillion, despite high prepayments among borrowers with adjustable-rate mortgages and slowing production volume, the company said today in a Securities and Exchange Commission filing. Net earnings from mortgage banking were $453 million for the quarter, up 4 percent from fourth-quarter 2005. At $2.06 billion, earnings for the year were down 15 percent from $2.43 billion in 2005. The year-over-year decline in profits from mortgage banking was attributed to declines in earnings from loan production (down 21 percent for the year), servicing (down 1 ...