Mortgage funder Resimac reported a profit for the year to June 2008 thanks to gains of foreign currency liabilities, though core operating costs exceeded income and the firm's core business is shrinking.The extent of the decline may not be too bad considering the difficult conditions facing non-bank mortgage funders. The loan book declined seven per cent to $4.5 billion at June 2008. The level of new loans funded by Resimac more than halved to $1.3 billion over the year.Credit quality improved over the year, with the percentage of loans 30 days or more in arrears declining to 1.8 per cent from 2.1 per cent.Resimac reported a net profit of $3.3 million in the year to June 2008 compared with a loss of $336,000 in 2007. Resimac restated its 2007 financial statements, having originally reported a small profit of $58,000 in 2007.The reported profit is sensitive to revaluation of foreign currency liabilities. The result includes a loss of $4 million on cross currency swaps and a gain of $12 million on foreign currency liabilities that, along with a gain on interest rate swaps added more than $8 million to the income line.Operating income of about $40 million is less than operating expenses of about $44 million. Employment expenses increased by one quarter to more than $20 million over the year.Resimac raised $3.3 million in provisions for the payment of goods and services tax that the firm had previously believed was subject to a reduced input tax credit, and which looks likely to affect many managers of securitised trusts.