Three Writedowns; Three Records.

For the nation's three largest mortgage servicers, the first quarter could have been a disaster.

With interest rates falling to record lows once again, the big servicers inevitably had to take hits to the value of their mortgage servicing rights. But for Washington Mutual, Countrywide and Wells Fargo, all's well that ends well.

All three reported record first-quarter income, with loan origination profits and financial hedges offsetting losses on the servicing side of the business.

Record mortgage volume translated into record income for Washington Mutual in the first quarter, with the company surpassing $1 billion in quarterly earnings for the first time.

WaMu also benefited from a rise in its net interest margin and successful hedging of its $728 billion mortgage servicing portfolio, which was subject to a $536 million impairment writedown in the quarter.

"We continued to be disciplined in our risk management and confident of our valuation methods," chief financial officer Tom Casey said on a conference call to discuss first-quarter results.

In addition, he said the average coupon rate on the servicing portfolio has declined to 6.66%, continuing a trend that will "lengthen the life of the portfolio and the customer relationship." Not to mention increasing the portfolio's value when rates rise.