Nationstar Holdings reported declining income in Q1. The company's mortgage related revenue fell from $173 million to $144 million, while the firm’s services-related net revenue fell from $616 million to just $283 million.
The market overall saw declines in mortgage revenue with PNC Financial Services Group, Wells Fargo, and JPMorgan Chase all reporting reductions in mortgage revenue in Q1 2017.
Even Bank of America, which reported a 40 percent increase in net revenue in the quarter, experienced a downturn in mortgage revenue, with total mortgage production of $15.5 billion in Q1, down by about $900 million compared to last year. Average loans and leases were down 20 percent overall. Residential mortgages comprised $69 billion in Q1, down from $87 billion a year ago.
What drove Nationstar in Q1 was its strong servicing segment, which saw a $26 million GAAP pretax income or $65 million adjusted pretax income. Still down from the firm’s strong Q4 2016, but a high-performing segment.
"In the quarter, Servicing delivered solid operational results with 5.6 basis points in profitability,” said Jay Bray, Chairman and CEO. "For the third year in a row, our Servicing operations achieved Fannie Mae’s highest level of recognition for performance, which reflects the dedication of our team members in providing the best possible home loan experience to all of our nearly 3 million customers.
Nationstar’s strong Q4 2016 was a strong end to the year, even stronger than the year before. Bray called 2016 an “incredible year of success,” and the company hopes to maintain that level of success following the transition of their company from Nationstar to Mr. Cooper, its new moniker.
“Looking forward, we believe we have significant growth prospects across all three segments and we continue to evaluate additional ways to increase shareholder value under our new Mr. Cooper brand,” said Bray.