Specialty servicer Ocwen Financial Corp., West Palm Beach, Fla., posted a third quarter loss of nearly $9 million due to $33.9 million of transaction-related charges tied to its purchase of HomEq, another specialty servicer.
Ocwen also suffered from $20.1 million in litigation costs.
The 3Q performance, however, is an improvement over the same period last year when it lost $42 million. (In that quarter Ocwen took a $56 million expense charge when it separated from its Altisource unit, formerly known as Ocwen Solutions. Altisource Portfolio Solutions, a publicly traded company, provides mortgage and technology related services to the industry.)
Pre-tax income for Ocwen's servicing unit was $5.4 million, 69% lower than the same quarter last year, but after adjusting for one-time charges income was 121%, or $21.6 million, higher due to growth and unit cost reductions.
The unpaid principal balance of Ocwen's servicing portfolio increased from $40.3 billion at Sept. 30, 2009 to $76.1 billion one year later.
Ocwen completed 15,928 modifications during the quarter, of which 4,241 were HAMP-related.
The litigation charges are related to a case tried in September brought by Cartel Asset Management where Ocwen was ordered by a jury to pay $12.7 million plus punitive damages.
