Servicing home mortgages for other investors returned to the profitable side of the ledger for the thrift industry during the third quarter of 2004, although most top thrifts actually pared back their MSR holdings, according to a new Inside Mortgage Profitability analysis. Overall, institutions regulated by the Office of Thrift Supervision reported $317.4 million in net profits on their MSR business during the third quarter – a major improvement over the $52.2 million loss these…