Ocwen records a $30M net loss as it prepares to buy PHH Mortgage
Ocwen Financial took nearly a $30 million net loss in the second quarter due to expenses ahead of its PHH Corp. acquisition that outpaced its mortgage servicing profits.
The company's results improved on its net loss of more than $44 million a year ago, but were less favorable than in the first quarter, when it generated $3 million in net income.
Ocwen's corporate segment took a $32 million net pretax loss, but the company also generated more than $2 million in pretax servicing income. This was down from more than $9 million a year ago and more than $20 million the previous quarter. Lending income rose to more than $1 million from a $600,000 loss in the second quarter of last year but was down from nearly $9 million in the first quarter.
"In the second quarter of 2018, Ocwen has remained focused on four areas: helping homeowners, resolving legacy regulatory and legal matters, investing excess cash and preparing for our merger with PHH," CEO John Britti said in a press release. "We have made progress in all four areas."
"Our primary emphasis, however, has been on developing our plans for integration upon closing of our merger with PHH," he added.
PHH previously cleared a key hurdle to the acquisition by generating first-quarter results sufficient to meet the terms of the transaction, which is slated to close in the third quarter. PHH is expected to report second-quarter earnings next month.
New Residential Investment Corp., which has been one of Ocwen's key business partners, recently recorded $175 million in net income in the second quarter, down from $322 million a year ago and more than $604 million in the first quarter.