Nonbank stocks fall on news of Ocwen earnings miss
Regulatory costs affecting sector
HW 30 stocks of nonbank mortgage servicers are down following the news that Ocwen Financial Corp. missed earnings expectations in the first quarter by $0.46.
- Ocwen Financial Corporation (OCN) is down 6.33% to 35.40
- Nationstar Mortgage Holdings (NSM) is down 3.76% to 31.52
- Walter Investment Management Corp (WAC) is down 3.72% to 25.63
Ocwen cited the added costs of regulator scrutiny as a factor in its $5.1 million loss on the $7.6 billion portion of the mortgage servicing rights portfolio, compared to a fourth quarter 2013 gain of $19.1 million. There was also an MSR impairment reversal of $2.4 million for the fourth quarter. Combined, these changes produced a $26.6 million change quarter over quarter.
Ocwen Chairman Bill Erbey noted that "increased compliance and operational risk management does not come without a cost, as you can see from our first quarter normalized earnings."
Both Nationstar and Walter will report first-quarter earnings on May 8.