Ocwen Posts Another Loss Despite Lower Expenses

Cost improvements weren't enough to keep Ocwen Financial Corp. out of the red during the first quarter.

The West Palm Beach, Fla.-based company reported a net loss of $111.2 million versus profits of $34.4 million a year earlier. Losses per share of 90 cents missed the average estimate of analysts polled by Bloomberg by 43 cents.

Contributing to the company's overall results was a $32.7 million loss due to unfavorable interest-rate-driven fair value adjustments to mortgage servicing rights. This led to a $68.3 million pretax loss for the company's servicing segment versus $46.7 million in income last year during the first quarter, on lower income from servicing and subservicing fees.

Ocwen's lending segment's profits dropped 87% to $2 million. The segment benefited from higher lock volumes in its correspondent and direct channels.

The company's corporate segment reported a $35.9 million loss, an 80% increase from the previous year.

Ocwen paid $30 million in monitoring-related costs during the quarter. Otherwise, expenses declined 13% to $328.7 million. Decreases in salaries, amortization of mortgage servicing rights and technology costs were partially offset by higher expenses for professional services.

"We are pleased to see the progress of our ongoing cost improvement efforts," Ocwen President and Chief Executive Ron Faris said in a news release Tuesday. "Excluding MSR fair value changes and monitoring expenses, which we have no or limited ability to control, and our new initiative spending, our servicing and corporate segments reduced expenses by $80 million."

Ocwen also reported that delinquencies dropped 57 basis points to 13% as a result of improved collections and loss mitigation efforts.

For reprint and licensing requests for this article, click here.
Servicing Compliance Correspondent Nonbank Mortgage defaults Consumer direct
MORE FROM NATIONAL MORTGAGE NEWS