Ocwen Active Buyer in Servicing Market

Mortgage loan servicer Ocwen Financial Corp. will be a buyer of mortgage servicing rights portfolios in 2010. The company had net income of $9.4 million for the fourth quarter of 2009. This compares to a net loss of $4.3 million for the fourth quarter of 2008. For the full year, West Palm Beach, Fla.-based Ocwen had net income of $272 million, down from net income of $13.2 billion for 2008. Chairman and chief executive William Erbey said "Strategic priorities for 2010 are: establish predictable and sustainable revenue growth in our servicing operations, improve process efficiencies to further reduce costs, improve quality, and reduce asset intensity and, therefore, enhance return on equity." As part of its revenue growth plan, Ocwen is actively seeking servicing rights portfolios to purchase. Mr. Erbey said "we are evaluating four servicing acquisitions, two of which, totaling $35 billion, are nearing final decisions." During the fourth quarter 2009, its servicing portfolio grew $9.7 billion or 24% from the end of the third quarter to $50 billion. Income from operations grew by 21% over the third quarter of 2009 principally due to an increase in revenues in the servicing segment of $9.4 million. The company completed modifications for the fourth quarter of 15,677 exceeding the top end of its previous guidance of 10,000 to 15,000. The 124% increase over third quarter modifications included 4,296 HAMP modifications. Full year profitability at the company was affected by a $50.6 million one-time tax expense arising from the separation of Altisource Portfolio Solutions S.A. (formerly Ocwen Solutions) in August, and the fourth quarter valuation allowance related to a non-cash deferred tax asset arising from deductibility of losses in a finance vehicle.