Ocwen Financial's shares jumped 19% to more than $10 a share as of late morning Friday, the day after it reported a first-quarter profit and highlighted an expansion into mortgage lending.

The Atlanta servicer sought late Thursday to allay investors' concerns about its struggles, saying it does not expect to face any fines or actions from regulators that would have a material impact.

Though profits fell 43% last quarter and its independent auditor will likely raise questions about Ocwen's prospects as a going concern when its long-delayed 2014 financial results are filed on May 29, Ocwen has renegotiated its debt and does not expect a default. Those reassurances clearly cheered investors Friday morning.

Kevin Barker, an analyst at Compass Point Research & Trading, said in a research note Friday that he does not expect Ocwen to be profitable over the next two years.

Ocwen plans to sell off more servicing of loans backed by Fannie Mae and Freddie Mac, and Barker expects its overall servicing portfolio will drop from $382 billion in the first quarter of 2015 to $253 billion in the first quarter of 2016.

"We expect operating expenses to drop off, but the cost to service an average loan at Ocwen will increase as the portfolio will be made up of more delinquent private-label loans and it takes longer to wind down servicing operations than it does to sell the assets," Barker wrote. "This will cause margins to squeeze."

Meanwhile, Ocwen has reached an agreement to settle charges with Assurant that it profited from kickbacks on force-placed insurance policies with struggling homeowners.

The settlement, filed in federal court earlier this week, would provide $140 million in monetary relief to nearly 400,000 borrowers. It would also provide an additional $10 million for legal fees and expenses.

At issue in the class action are insurance policies placed on foreclosed properties, to cover hazard, flood, flood-gap and wind insurance. Plaintiffs in the case accused Ocwen of inflating premiums and profiting from kickbacks through an arrangement with Assurant, the New York-based insurance provider that administered the policies.

"Ocwen decided to settle this matter to avoid prolonged and distracting litigation. The company does not admit any liability or wrongdoing with respect to this matter," the company said in an email.

Kristin Broughton contributed to this report.

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