Firstfolio, a consolidation play in the mortgage aggregation and mortgage management sector, is finally turning a profit.Yesterday, the company reported an EBITDA profit of $5.4 million following a small loss last year. Net profit was $3.3 million after a loss in 2008 of $1.1 million.Two takeovers lifted the combined funds under management and funds under administration by 50 per cent to $12 billion. Around a quarter of this is under management and the rest under administration. Organic lending growth was around $400 million.Firstfolio bought eChoice, an online introducer, for $19.2 million in November last year. The firm bought Domain Financial Services, a mortgage manager, for $6.8 million in December.These two entities contributed incremental profit equal to the rise in profit for the group, and incremental revenue of around $9 million to Firstfolio in the six months or so of ownership. Since reported revenue increased only $6 million (to $47 million) some more established mortgage businesses of the group may not have fared so well over the last year.  eChoice, which generates commission revenue from $2.6 billion in loans, generates "several thousand new mortgage applications" each month according to the annual report. Domain has a mortgage portfolio of $1 billion.Firstfolio said it estimated its "underlying, annualised earnings run rate at $7.6 million for the last financial year, and forecast an EBITDA for 2010 of between $10 million and $11 million.The takeovers of eChoice and Domain added plenty of goodwill to the balance sheet, and the auditor noted an "inherent uncertainty" over whether Firstfolio was a going concern due to a deficiency in tangible assets of $31 million.Mark Forsyth, chief executive, said interest in demand for new finance was strong (and consistent with the wider market). He also expressed optimism that the poor service levels at banks (a function of the rise in demand) would help smaller lenders gain market share.He said the group's three main funders - ING, Bendigo and Adelaide Bank, and ANZ (through Origin) had all renewed funding lines.Forsyth considers Firstfolio may be the largest non-bank lender in the market at present.New hires in recent months include Brett Mansfield from ING and Andrew Russell from Virgin Money.