MAY 2, 2013 11:36am ET

Ocwen First-Quarter Revenue Sets Record

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Ocwen Financial Corp. produced record revenue in the first quarter of 2013 as well as a year-over-year increase in overall net income.

The Atlanta-based financial holding company that services and originates mortgage loans reported revenue of $406.7 million in 1Q13, up 147% from last year.

Meanwhile, Ocwen’s net income was $45.1 million, or $0.31 per share, during this time period. In 1Q12, the company’s net income was only $19.3 million, or $0.14 per share.

Income from operations in the latest quarter grew by 108% to $163.1 million as compared to $78.4 million a year ago.

“Ocwen’s core earnings and cash flow were strong in the first quarter, and we should see these trend higher as a percentage of revenue as we drive down costs and delinquencies on newly acquired business,” said Bill Erbey, chairman of Ocwen. “Ocwen’s lower funding costs and improving prepay speeds on nonprime loans should also support better performance versus our original expectations.”

During the first quarter, Ocwen completed the acquisition of servicing rights and other assets from Residential Capital, in which $269 billion of unpaid principal balance was added to the company’s servicing portfolio.

Additionally, Ocwen sold $703 million of servicing advances and the rights to receive the servicing fees on approximately $15.9 billion of unpaid principal balance to Home Loan Servicing Solutions in March. Overall, Ocwen’s Homeward lending operation originated nearly $2.4 billion of fundings with another $400 million originated via partnerships.

In the first quarter, Ocwen completed 24,184 loan modifications. HAMP modifications accounted for 34% of this total.

“We would expect quarterly modification volume to increase as our modification programs are applied to the newly acquired servicing portfolios,” said Ron Faris, president and CEO of Ocwen. “Declining prepayments on our legacy nonagency portfolio combined with lower interest expense on advances should strengthen our earnings picture.”

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