Guild Holdings Company, the parent company for Guild Mortgage, reported a net loss of $66.9 million on originations of $6.9 billion in the third quarter. The company earned $37 million in the second quarter of this year.
Stung by declines in the interest rate in the third quarter, Guild experienced most of its losses in the servicing segment, which fell into the red by $74.6 million. The quarter before the servicing segment enjoyed a net income of $69.5 million. Value adjustments on mortgage servicing rights (MSRs) resulted in a loss of $145.8 million, compared to a gain of $2.1 million in the second quarter.
Originations were a bright spot, with a net income of $6.4 million in the quarter, compared to a net loss of $3.1 million in the second quarter. Higher origination volumes and better sale margins were the reasons for the improved performance.
Despite the losses, Guild CEO Terry Schmidt said third-quarter results demonstrated continued positive momentum, and the successful execution of their growth model.
“Our focus on achieving profitable, long-term market share gains, along with our balanced business model of originations and servicing, positions us for success throughout macroeconomic environments,” Schmidt said. “We are confident in our platform, products and people, and anticipate seeing enhanced production from our expanded origination network over time, while we will remain disciplined in order to deliver long-term value to our shareholders.”
While originations were up $400 million from the second quarter, net revenue fell to $159.3 million, compared to $285.7 million in the previous quarter. The servicing portfolio’s unpaid principal balance reached $91.5 billion, up 3% from the end of June. The adjusted net income rose $1 million during the quarter to $31.7 million and the return on equity was 22.5%, compared to 12.3% in the second quarter.
Year-to-date, total originations rose to $17.3 billion, compared to $11.6 billion in the prior year, while net revenue reached $676.7 million, up $78.7 million from 2023. For the first three quarters of this year, the company net loss has reached $800,000, compared to a net income of $54 million in 2023.
