PHH Corp. acquisition helped Ocwen cut its losses
Ocwen Financial reduced the size of its net loss by nearly half during 2018 thanks to cost-cutting measures, and economies of scale from its acquisition of PHH Corp.
The company recorded a net loss of almost $71 million for the year, down from $128 million in 2017. It also recorded a net loss of more than $2 million for the fourth quarter of 2018, down from more than $45 million during the fourth quarter of 2017.
"We made solid progress in the quarter as we work to realize the scale and cost savings benefits of combining Ocwen and PHH and position the company for future profitability. We are focused on executing our key business initiatives in order to address our most critical near-term business challenges, improve our financial performance, and establish a stronger foundation for the future. We continue with our disciplined and prudent approach to our integration efforts and are encouraged by the overall progress we are making," Glen Messina, Ocwen's president and CEO, said in a press release.
Ocwen's servicing segment took a pretax loss of almost $41 million for the fourth quarter of 2018 that included a post-acquisition pretax loss of more than $21 million; and the company's lending segment generated $3 million in pretax income for the quarter.
The lending segment benefited from favorable changes to the reverse mortgage portfolio's valuation due to falling interest rates.
In addition, the PHH acquisition added to lending volume on a consecutive quarter basis, the company noted in an investor presentation. Ocwen's quarterly lending totaled $395 million in the fourth quarter, up from $320 million in the third quarter.
Ocwen also noted in separate press releases that there will be changes to two executive positions and its board.
June Campbell, a former GE Capital executive, will become Ocwen's new chief financial officer starting March 4, and Joseph Samarias, senior vice president and deputy chief counsel, will be promoted to succeed Timothy Hayes as executive vice president and general counsel on April 1.
Carole Galante, a former regulator, will leave the board when her term is up at the next annual meeting rather than standing for reelection. Two new directors will join Ocwen's board: Kevin Stein, a former mortgage banking executive who currently is the CEO of a firm that buys commercial judgments, and Jenne Britell, chairman of the board at United Rentals.