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Nonbank stocks fall on news of Ocwen earnings miss

Regulatory costs affecting sector

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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. 

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