Question-and-Answer Session
Operator
Thank you. (Operator Instructions) And we will take our first question from Bose George with KBW.
Bose George - KBW
I have a couple of questions. First, just wanted a little more clarity on the fleet business improvement. You’ve given that the revenue run rate was $18 million in the second quarter, I was just curious about the guidance of 30 to 40, since you've already done $25 million in the first two quarters?
George Kilroy
Yes. Let me take that one. The actual the, there was profit of $18 million for the second quarter and profit of $25 million for the first half. We would love to be able to tell you of double that and get to the year but we think we have some cost in the second half that would have normally, we would have anticipated in the first half, for example, fees that are associated with some of the funding structures that we're going to put in place in the second half.
We also are seeing a trend towards slightly lower volumes, although as we said we're seeing the order volume, kind of a pent-up demand building up in the second half. So, right now we are comfortable moving to the $30 million to $40 million.
Bose George - KBW
Then just, switching to the mortgage segment, can you talk about the potential value to your MSR if we see a lot of loan modifications, just given the longer duration of the new assets and just leaving aside the potential benefit of the fees that you're going to get from the government or you might get from the government. What is the loan models that do just suit you the best way you value your MSR?
George Kilroy
Let me, let Mark answer that one.
Mark Danahy
The modification will move the loan from a delinquent loan to a current loan. So, you will end up collecting service fees. From a value perspective, you'd expect to see that. It would most likely have a lower rate associated with it, which will improve its value somewhat from a prepayment propensity perspective.
Bose George - KBW
So it's not unreasonable to think that, I mean it helps the value of the MSR if there is, if a lot of these loans, delinquent loans end up modifying?
George Kilroy
Absolutely. I mean it helps the MSR, it helps the underlying cash flow because we'll collect fees again.
- To read the full transcript on Seeking Alpha, click here »
