Ocwen Expects to Report Loss in Current Fiscal Year

Ocwen Financial said it expects to report a loss in its current fiscal year, as it continues to cut costs amid an investigation of its practices.

The Atlanta mortgage servicer estimated that cost cuts will produce at least $150 million in savings in its next fiscal year, compared to the current fiscal year.

Ocwen said it continues to pay down debt and that it expects to pay down an additional $424 million in debt during the second half of the current fiscal year.

Additionally, Ocwen said it terminated a servicing contract with Fiserv, which it estimated will produce $18 million of savings next year.

Ocwen provided the update in a presentation to investors on Tuesday.

Joseph A. Smith Jr., who leads the Office of Mortgage Settlement Oversight, launched an investigation of Ocwen in December after the company's internal review group was accused for failing to pick random files for review. Smith determined that Ocwen's internal review group was in compliance with the national mortgage settlement.

Ocwen has taken other corrective actions to addressed missing or incomplete documents for loan modifications, after failing a testadministered by Smith.