Plaza Blames Losses on Low-Interest Loans : Earnings: Mortgage company revises its third-quarter results to include a write-down of $15.9 million.

Saying that it is losing money on low-interest-rate home-loan refinancing, Plaza Home Mortgage Corp. revised its third-quarter results on Monday to include a write-down of $15.9 million.

The change means that the fast-expanding home loan company took a loss of $4.9 million, or 44 cents a share, for the quarter.

Plaza is one of a handful of publicly traded mortgage lenders nationwide that have announced such write-downs during the past few months. The largest write-down came from Fleet Mortgage Group, the nation’s second-largest home loan provider. Fleet, based in Columbia, S.C., charged $100 million against its second-quarter earnings.

Lenders say that speedy mortgage refinancing, triggered by low interest rates, is not giving them a chance to make money on the loans.

On average, mortgage lenders collect an annual servicing fee of three-eighths of a percentage point of the value of each home loan. If the loan stretches over a period of time--at least three to five years--lenders make a profit on servicing fees.

With the unprecedented low interest rates of the past two years, however, some homeowners have refinanced two or three times. It costs the lender money each time to write a loan, and that expense has been outpacing servicing fees.

John T. French, Plaza’s chairman and chief executive officer, said, “The valuation of our purchased mortgage servicing rights has been adversely impacted by the unprecedented level of loan prepayments in recent months, fueled by historically low interest rates.”

Plaza purchased the mortgage servicing rights when it bought Sandia Mortgage Corp. of Albuquerque, N.M. The acquisition was completed in June, and the companies’ portfolios were consolidated by Oct. 1.

Marketing tools such as “zero-point” and “no-cost, no-fee” mortgages have boosted lenders’ revenues dramatically but have also contributed to money losses, said Lionel Punchard, president of privately held First Republic Mortgage Corp. in Santa Ana.

“Lenders probably didn’t think rates were going to continue to decline,” he said. “They are now realizing how much money they’re losing by offering this type of refinancing tool.”

Bruce Schnelwar, chief financial officer of Margaretten Financial Corp., which took a $60.3-million quarterly write-down for the same reasons, said mortgage banking subsidiaries of banks have most likely been doing the same, “but they’re not separate reporting entities, so you don’t see the numbers.

“There may be more coming, it’s hard to know,” he said from the company’s headquarters in Perth Amboy, N.J. “The rates have started back up a bit, so that may help.”

The flip side of the story is that new loan figures have soared for home lenders: Plaza’s total topped $1 billion in October for the first time.

Plaza, based in Santa Ana, has been expanding nationally. Last year, the company raised $32 million in an initial public stock offering and started opening loan offices from Washington state to Florida.

The company reported 1992 earnings of $14.5 million and has won praise for approving mortgages in low- and middle-income areas.